Throw Light on HMO Complaints

Last month the state Supreme Court essentially prohibited health plans from sealing medical records involved in lawsuits if disclosing them would benefit the cause of public health. This is a broad-brushed decision that could cover almost any quality problems at an HMO.

There is, however, a big catch: The court’s sensible rule does not formally apply to the 80% of the state’s managed-care enrollees--fully 18 million Californians--whose health plans require them to settle their disputes through private arbitration rather than public lawsuits.

No one except HMOs benefits from the secrecy that now shrouds information involved in arbitration, ranging from depositions and discovery documents to records of settlements and civil penalties.

That’s why Daniel Zingale, director of the state Department of Managed Health Care, should do his best to comply with a consumer petition filed last week asking him to require health plans to publicly disclose such documents. Zingale may need help from state legislators, who might have to pass a bill explicitly giving him that authority, which he now has only implicitly and indirectly under the state’s Health and Safety Code. Arbitration disclosure rules will also have to be crafted carefully to protect patient privacy by deleting names.

These obstacles, however, should not be allowed to keep arbitration information from regulators, who could use it to help ensure overall quality of care, and from HMO patients, who might use it to challenge managed care more assertively. A recent Henry J. Kaiser Family Foundation study found that only 6% of patients with managed-care disputes filed formal claims with their health plan or an external official.

Some HMO leaders worry that lifting the secrecy of arbitration proceedings would only foment public outrage that could lead to legislation banning mandatory arbitration clauses.

Arbitration is, as the HMOs assert, a generally cost-effective alternative to lawsuits. However, as the California Research Bureau pointed out in a report last month, arbitration can be unfairly biased toward health plans. Contrary to HMOs’ fears, greater public disclosure of arbitration could help HMOs and state regulators remedy such unfairness and thereby strengthen, not weaken, arbitration’s credibility.