Purported "Independent" Kaiser Arbitration Administrator Refuses to Answer Questions About System & Her Independence
Foundation for Taxpayer & Consumer Rights Corporateering
  Home | Volunteer | Donate | Subscribe | FTCR Websites | Books | Site Map   
Main Page
Press Releases
In the Media
Factsheets
Reports
Medical Malpractice Stories
HMO Arbitration Abuse Report
Casualty of the Day
 
 OTHER TOPICS
 - Corporate Accountability
 - Insurance
 - Citizen Advocacy
 - The Justice System
 - Billing Errors
 - Energy
 - About FTCR


Read Making a Killing

home / healthcare / press releases

NEWS RELEASE
Apr 08, 2002


CONTACT: Emmy Rhine - 310-392-0522 x320

Purported "Independent" Kaiser Arbitration Administrator Refuses to Answer Questions About System & Her Independence

Supposedly Independent Administrator Puts Herself Above Public Scrutiny
The "independent" administrator for Kaiser Permanente's mandatory arbitration system has refused to answer serious questions about her independence and failures within the arbitration system she administers.

The nonprofit, nonpartisan Foundation for Taxpayer and Consumer Rights (FTCR), which submitted the questions in response to mounting concerns about fairness from patients and attorneys, said the refusal demonstrated that Kaiser's arbitration system was still unaccountable to the public and in need of reform. The California Supreme Court ruled in 1997 that Kaiser had "established a self-administered arbitration system in which delay for its own benefit and convenience was an inherent part, despite express and implied contractual representations to the contrary." In wake of the decision, Kaiser announced it had reformed its system.

Sharon Lybeck Hartmann -- overseer of the new Office of the Independent Administrator (OIA) -- refused to answer questions on the grounds that she was being defamed by FTCR. She also testified last month before the California Assembly that there is no system in place for dealing with patient grievances.

"This is still an unaccountable system unanswerable to patients and the public," said Jamie Court, executive director of FTCR. "An independent system should not be above public scrutiny. Patients would never choose such an unanswerable system voluntarily, which is why Kaiser forces it upon them. The legislature must allow patients the right to choose trial though Senate Bill 458 so that HMOs offer more attractive arbitration systems. "

FTCR's queries ranged in focus from the treatment of patients who lack attorney representation -- 28% of Kaiser claimants -- to procedures for spotting and addressing systematic patterns of malfeasance. Among the questions:

Does the OIA have any mechanism in place to detect systematic patterns of malfeasance at Kaiser?
Has the OIA devised alternative mechanisms for assisting claimants without representation?
What comments were given by in pro per claimants in your Party & Attorney Evaluation of Neutral Arbitrators to explain the low ranking (2.5 median on a scale of 1 to 5) given to neutral arbitrators with respect to impartiality and fairness?
Does the OIA have knowledge of other patient deaths involving undiagnosed or untreated abdominal aortic aneurysms?

In addition to system operations, FTCR inquired about Hartmann's role in Kaiser lobbying activities. The OIA website prominently declares, "We are a neutral, independent office. We are not part of Kaiser." Nonetheless Ms. Hartmann was named in correspondence to the Assembly Judiciary Committee as the "representative" of the Civil Justice Association -- a group chaired by Kaiser's lobbyist Michael Hawkins and which includes Phillip Morris, State Farm, Farmer's Insurance, and other large corporations. Moreover, Hartmann previously appeared uninvited before the legislature to testify with Kaiser and other supporters of a Kaiser-sponsored bill. FTCR asked Hartmann about these activities.

The correspondence to Hartmann and a full list of questions is attached.

FTCR is the sponsor of SB 458 (Escutia), which makes HMO arbitration voluntary under California's HMO liability law. The bill has passed the California Senate and is awaiting action in the Assembly Health Committee.

###



February 26, 2002

Sharon Lybeck Hartmann
Office of the Independent Administrator
located in the
Law Offices of Sharon Lybeck Hartmann
3580 Wilshire Boulevard, Suite 2020
Los Angeles, California 90010
VIA FACSIMILE & US MAIL

Dear Ms. Hartmann,

We received your response to our January 23rd letter to the Assembly Judiciary Committee about the "independent" Kaiser Arbitration System, as administered by yourself and your staff at the Office of the Independent Administrator (OIA). The information that you provided raises still additional concerns. In conjunction with new revelations, we believe the following issues warrant your further explanation and ask that you respond in writing to the questions below by March 4, 2002.

Your Role in Kaiser's Lobbying Agenda

You claim you have "never lobbied for Kaiser" and promise to "not do so." Nonetheless Jeff Seivers of the Civil Justice Association -- formerly the California Tort Reform Association -- announced in correspondence to the Assembly Judiciary Committee this month that you would act as the corporate lobby's "representative" at upcoming hearings. As you may know, Kaiser's lobbyist Michael Hawkins is the chairman of the Civil Justice Association, a group which includes Kaiser, Phillip Morris, State Farm, Farmer's Insurance, and other large corporations. The fact that you would represent this group before the California Legislature in the Association's effort to restrict consumer's legal rights and remedies sheds serious doubt on your "independence" from Kaiser and its lobbying agenda. Moreover, you claim that you simply provided information to the Assembly Judiciary Committee and legislators previously during the year 2000, but this did not constitute "lobbying." However, the Senate Judiciary Committee did not invite your testimony in 2000 on arbitration, which means that your activity testifying with Kaiser and other supporters of a Kaiser-sponsored arbitration bill constitutes lobbying under state law. Your testimony touting the OIA's effectiveness, delivered side-by-side with Kaiser and other supporters, was clearly a communication to legislators intended to influence the outcome of the specific legislation standardizing for all arbitrations the OIA rules. The same would apply to your private meetings with legislators if your opinions were not solicited by the members themselves and were delivered in the same vein and arranged by Kaiser lobbyists. Your answers to the following questions will help clarify your role:

1. In stating that you "do not lobby for Kaiser" are you saying that you are not a representative for the Kaiser-chaired Civil Justice Association and that Mr. Seivers was in error?
2. What is the nature of your affiliation to the Civil Justice Association?
3. What is the content of conversations which have occurred between yourself and members of this corporate lobbying group?
4. With regard to your admission of having "met individually with members of the legislature and with their staff members to give them more information about how the system is operating,"
a. Which legislators and staff members did you meet with?
b. What was discussed?
c. Were Kaiser lobbyists or representatives also present?
d. What led you to these meetings? Were they initiated at Mr. Hawkins's suggestion or request?
e. Did the legislators themselves or members of their staff request the meetings?
f. Can you provide documentation of these requests if they did occur?
5. If you did not receive an invitation from the Senate Judiciary Committee requesting your testimony of April 25, 2000, then why do you not consider your appearance lobbying (a communication to specific legislators on specific legislation to influence its outcome)?
6. If the Committee did not officially request your testimony, then at whose suggestion or request did you appear?
7. Was your testimony coordinated by or delivered at the request of Mr. Hawkins?
8. Why do you believe it is proper for an "independent" administrator to be introduced by Kaiser's lobbyist at a hearing on a Kaiser-sponsored bill to present information that can only lead listeners to support the legislation?
9. Why did you appear with supporters of the bill, introduced by Mr. Hawkins, if you did not coordinate your testimony with him?
10. Are you asserting that to appear before the Senate Committee alongside Kaiser's lobbyist and to testify in conjunction with the bill supporters constitutes having "never taken a position?"

Your Dismissal of Dangers in OIA as Uniform in "All Forms of Arbitration"

You dismiss the serious problems confronted by Kaiser patients in the OIA system with the explanation that they "are true of all forms of arbitration." This statement ignores both your authority and your duty to remedy these ills for the millions of victims bound to the OIA as the sole legal recourse against medical negligence, impropriety, injury, and death.

The secrecy which applies to arbitration in general becomes exceedingly menacing in a system which binds over 28% of California's medically insured population. All patterns of systematic failure, negligence, and malfeasance at Kaiser are buried in your system unless voluntarily reported by involved parties. As you know, the Department of Managed Health Care (DMHC) recently fined Kaiser $1.1 million for systematic failures in its emergency care system leading to three patient deaths from ruptured abdominal aortic aneurysms. Through review of self-reported award summaries, the Los Angeles Times soon after uncovered an additional nine cases of death or serious injury caused by similar systematic flaws (1/2/02). Were it not for the investigative reporting of the Times, what we now know of the devastating extent of these failures would have remained secret.

11. Is the OIA aware of any other cases of patient death or injury resulting from the same systematic failures reported on by the Los Angeles Times?
12. Does the OIA have knowledge of other patient deaths involving undiagnosed or untreated abdominal aortic aneurysms?
13. Does the OIA have any mechanism in place to detect systematic patterns of malfeasance at Kaiser?
14. If any member of the OIA staff identifies a pattern of malfeasance in Kaiser cases, will this vital information be reported to the public?
15. If no mechanism is currently in place to spot systematic patterns of malfeasance in Kaiser cases, will you create one and report any findings on your web site?
16. Will you request permission from all Kaiser claimants to make public the facts of their cases -- absent party names -- and report this information regularly on your web site and in a separate section in all future OIA annual reports?

In Pro Per Claimant Experiences

28% of Kaiser plaintiffs lack attorney representation, according to your Second Annual Report. We have been contacted by countless such in pro per claimants who have relayed the obstacles and biases they have encountered in the OIA. These experiences are substantiated by several statistics included in your Second Annual Report:

Your Party & Attorney Evaluation of Neutral Arbitrators resulted in a median ranking by in pro per claimants of only 2.5 (on a scale of 1 to 5) for whether the "neutral arbitrator was impartial and treated all parties fairly."
While in pro per claimants represent 28% of all cases, this same group disproportionately represents 75% of all cases resulting in summary judgement, 71% of all abandoned cases, 49% of all withdrawn cases, and less than 3% of cases which proceeded to a hearing culminating in a plaintiff award.
Your Questionnaire for Neutral Arbitrators resulted in requests by the respondents "for additional help for the 28% of claimants who represent themselves."

Clearly the experiences had by unrepresented claimants in the OIA are far from "model." Both your First and Second Annual Reports are lacking in information on the problems encountered by this group.

17. What comments were given by in pro per claimants in your Party & Attorney Evaluation of Neutral Arbitrators to explain the low ranking given to neural arbitrators with respect to impartiality and fairness?
18. What reasons were cited in your Questionnaire for Neutral Arbitrators for the request that more help be provided to claimants without representation?
19. What is the precise statistical comparison between claimants with and without representation with respect to the frequency and amount of awards received in each type of resolution?
20. Will you include this information in all future OIA annual reports?

You admit that pro per claimants are the "least satisfied" in the OIA system. Yet the only remedy you suggest is an intention to eventually create a pamphlet "describing the requirements of the arbitration system."

21. How is a pamphlet expected to effectively remedy the serious problems encountered by pro per plaintiffs in the OIA?
22. Has the OIA devised alternative mechanisms for assisting claimants without representation?
23. Will you request that Kaiser permit claimants unable to secure representation an option to have their case heard in court and report back to us with its answer?

Repeat Player Problems Persist in OIA

Though you claim to have resolved the repeat player problem condemned by the California Supreme Court, data presented on page 8 of your Second Annual Report reveals that 108 neutral OIA arbitrators had been selected between 3 and 29 times. The conflicts of interest inherent in this repetition unjustly place the needs of victims at odds with the arbitrators' desire for future business. In order to allow for public investigation in to this problem and to utilize public oversight as an additional means of mitigation, would you support the following:

24. Will you provide a record, accessible on your web site and undated regularly with the following information on each OIA panel arbitrator: their fee schedule and for each arbitration, the date of closure, total number of working days, type of resolution, and award amount?

Again, we appreciate your willingness to address these concerns and look forward to your response.

Sincerely,




Jamie Court
Executive Director

Emmy Rhine
Consumer Advocate

cc: California Assembly Judiciary Committee
California Assembly Committee on Health




back to top

©2000-2004 FTCR. All Rights Reserved. Read our Terms of Use and Privacy Policy | Contact Us