Kaiser’s Arbitration System Faces Scrutiny Again

Wilfredo Engalla, a 51-year-old Filipino immigrant, highlighted a significant concern with Kaiser’s arbitration system when he alleged medical malpractice. Doctors misdiagnosed him for years, telling him he had colds and allergies, only to later reveal he had terminal lung cancer. He died before his complaint reached arbitration, a process required by his Kaiser policy. This case led to a notable rebuke from the California Supreme Court in 1997, criticizing the arbitrating system for being lengthy and unfair.

Nearly three decades after that decision, questions about Kaiser’s arbitration system remain. Attorneys, legislators, and patients continue to argue the process is skewed in favor of Kaiser. Kaiser, insuring about 25% of Californians, including some Los Angeles Times employees, defends its system as fair and compliant with laws.

Concerns About Arbitration System

Unlike most companies sending claims to large arbitration firms, Kaiser established its own procedure in 1971. Both parties can disqualify arbitrators without cause, and no cap exists on such disqualifications. Despite the intention of fairness, critics argue that Kaiser’s familiarity with the system gives them an advantage. Arbitrators may have financial incentives to favor Kaiser to secure further opportunities.

Arlan Cohen, an attorney and physician, has argued numerous cases against Kaiser and points out flaws in their system. While Kaiser has full access to arbitrators’ past decisions, patients receive limited disclosure, possibly tipping the scales towards Kaiser. The health plan disputes allegations of choosing favored arbitrators.

Repeat Player Effect

Experts mention the “repeat player effect,” where frequent parties like Kaiser potentially have an upper hand. David Allen Larson of the American Bar Association highlights that while patients choose an arbitrator once, Kaiser does it daily, leading to a process that benefits them.

Alan Kang, representing the Aquino family in a recent case, claims that significant fees paid to arbitrators encourage verdicts in Kaiser’s favor. Kang’s analysis of cases reveals that frequent arbitrators tend to rule for Kaiser. Although Kaiser remains silent on these claims, they maintain their arbitration approach is designed to be impartial.

Advantages and Criticism

The arbitration process holds potential benefits, such as reduced legal costs and quicker resolutions than courtroom proceedings. However, decisions are difficult to appeal. Kaiser’s post-1997 reforms established an independent administration office to manage arbitrations, funded by Kaiser’s trust and fees paid by patients filing claims.

Kaiser’s selection of arbitrators includes 195 retired judges and lawyers. Although both parties can eliminate candidates they don’t prefer, critics say the possibility to remove selected arbitrators without cause doesn’t ensure fairness.

Issues in Patient Safety

The secretive nature of arbitration may obscure medical errors. Public court cases can expose poor practices and prevent future failures. For instance, the case of Francisco Delgadillo, who died in a Kaiser ER due to delays in care, resulted in a settlement, but details remain confidential.

Despite secrecy concerns, critics argue that Kaiser prefers arbitrations behind closed doors to avoid juries.

Calls for Further Reform

Even with reforms, patients keep voicing concerns. The administrator’s annual report indicates that biases in arbitrator selection are a frequent complaint. Assemblyman Robert Garcia introduced a bill to enhance oversight, allowing the California attorney general to monitor health plan arbitrations.

Assembly Bill 1770 aims for greater transparency in arbitration. However, Kaiser worries it might lead to redundant oversight and increased reporting burdens.

Case Studies and Impact

In personal stories like Janene Fowler’s, the arbitration process’s flaws become evident. Her alleged misdiagnosis of a vitamin B12 deficiency resulted in lasting damage, but the arbitrator sided with Kaiser’s defense. Her lawyer contends the ruling contradicts medical records.

Fowler’s experience highlights ongoing issues within the system. She expresses feeling neglected by the process, questioning the justice in a system managed by those being challenged.