| Home | California court rules delay in HMO arbitration process grounds for suit posted 7-7-97 HMOs and other companies that require customers to use an internal arbitration process can be sued if they drag their feet in appointing neutral arbitrators and reaching decisions, according to a ruling by the California Supreme Court. The case involved Kaiser Permanente and the family of a Wilfredo Engalla. In a 6-1 vote, the court found evidence that Kaiser routinely delayed the arbitration process for its own benefit and convenience. The justices also noted that the HMO claims in its promotional materials that selecting an arbitrator takes about two months, but that statistics show the arbitrator selection averages more than two years in the Kaiser system. The Supreme Court ruling sends the case back to trial court, where the question of whether Kaiser committed fraud will be decided. Engalla and his family requested arbitration in May 1991, claiming that Kaiser had misdiagnosed Engalla’s lung cancer for five years. The family withdrew from arbitration after Engalla died in October 1991 and sued Kaiser, challenging the arbitration system and claiming that Kaiser "intentionally" delayed the arbitration process. Kaiser says it has improved its arbitration process since 1991 by making the administration of the program more efficient. It has also added a "fast-track" arbitration option for situations in which delay might harm a patient’s health, according to Kaiser spokesperson Tom Debley. He said Kaiser believes the trial will show the HMO did not deliberately delay Engalla’s arbitration and said that Kaiser Northern California gets only about 10 to 15 arbitration requests per year although it has 2.5 million members.
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