Arbitration of Negligence Claims Is Required

By Your Kaiser Service Agreement


            Under the Kaiser Service Agreement, any dispute about plan coverage or any claim of patient injury caused by substandard medical care must be decided through a private arbitration system developed by Kaiser.  Under this system a Kaiser member cannot use the conventional state courts to seek compensation for injury caused by negligence. And as for establishing proof of negligence, private arbitration and state courts are much the same. 


            In all but a very few instances, in order to present a plausible case, medical experts must testify that the care provided was sub-standard. During the arbitration proceeding, a claimant must introduce evidence by medical experts that the care received was below the sub-standard care that caused the patientís injury.    The requirement for expert testimony means that it is very rare for a claimant without an attorney to effectively represent himself or herself in a Kaiser arbitration proceeding.


     It is the opinion of this lawyer that private arbitration may be, for certain kinds of medical negligence cases, a better forum than a state court for prosecuting a medical malpractice claim.  Although this opinion may be controversial among lawyers, I am of the opinion that if the arbitrator is fair, a claimant is more likely to prevail through arbitration on a simple medical negligence claim than before a jury.   Juries tend to be reluctant, except in egregious cases, to find that doctors or nurses have been negligent, especially if the defendant physician has a warm, kindly, ingratiating and authoritative manner.   An arbitrator who has been either a judge or experienced attorney is more likely to discount personal and professional attributes of the defendant and determine whether the doctor was negligent, based on the medical evidence  


            On the other hand, it is the opinion of this lawyer that a claimant is likely to receive less compensation for his or her injuries from an arbitrator than from a jury.


    Arbitration has been touted as having other benefits over state court, including the contention that it takes less time and is less costly.  That is not my experience. 


            Arbitration of complex claims takes just as much time and work and expense as in state court.  Arbitration of complex claims may be more costly because the parties pay the cost of the arbitrator's fees, which are generally $200 to $400 per hour.  


             One of the principal problems with private arbitration relates to how the arbitrator is compensated.   When one of the parties pays the arbitrator, or provides repeat business to an arbitrator, private arbitration may be subject to bias. Because millions of people belong to Kaiser, many claims of substandard care are made against it each year. Given these numbers arbitrators who hear and decide claims can expect to earn significant income from repeat business if they arbitrate several Kaiser claims per year.  If Kaiser accepts a decision by a particular arbitrator as fair, then Kaiser will look favorably upon that arbitrator, and will agree to have that arbitrator hear additional arbitrations.  If, however, Kaiser does not like an arbitrator's decision in a particular case, it has the power to prevent that arbitrator from being appointed again to hear additional arbitrations involving Kaiser.   In other words, in order to get repeat business an arbitrator must look over his or her shoulder to be sure that his or her decision does not offend Kaiser.  State court judges, who are paid by the state of California, do not have to consider what Kaiser will think about a decision that is rendered in a state court.


            Because of the issue of repeat business, there is concern in the legal community that arbitrators will decide closely contested claims in Kaiser's favor, or give low awards to claimants who prove that they received substandard care and were injured.


            In 1998, the California Supreme Court issued a decision involving the Kaiser arbitration system which was very critical of Kaiser.  As a result, a commission composed of noted jurists, attorneys and public members was appointed to review and make changes to the Kaiser arbitration system. Those changes have helped to make the Kaiser arbitration system more equitable.  However, the concerns raised by the issue of repeat business remain.


     Lastly, it is this lawyer's opinion that arbitration provides Kaiser with a significant benefit relating to the suppression of medical mistakes.  It has been this lawyer's experience that medical mistakes are generally concealed.  This is done in a variety of ways, including omissions, alterations and fabrications of medical records (A problem that is not limited to Kaiser).   If a medical malpractice case were being heard by a jury - as opposed to an arbitrator - the private citizens comprising the jury might very well assess punitive damages against the medical provider if they believed that the provider had falsified medical records to conceal negligent care.  It is this attorney's belief that an arbitrator in a Kaiser arbitration would never punish Kaiser with punitive damages because that would be the last Kaiser arbitration which that arbitrator would ever hear. w

ould ever hear.