What is arbitration?
Arbitration is a legal process in which disputes are resolved by an impartial third party such as a neutral hearing officer or retired judge.
In arbitration, a final decision is rendered by a private arbitrator. In a court proceeding, either a judge appointed by the governor and confirmed by the legislature, or a jury of 12 citizens, decides what is a fair and just outcome.
In its contract with its members, Kaiser requires the members use arbitration for any claim of medical malpractice. Kaiser says its justification for forcing members out of the justice system is because arbitration is cheaper and faster for members. In fact, this claim is not always true.
How does a Kaiser arbitration differ from other arbitrations?
There are many types of arbitrations. Arbitration was originally conceived as a way to resolve commercial disputes quickly. The Kaiser model is different from commercial arbitration. The Kaiser model uses court rules of procedure and the California evidence code. It applies the same law as juries apply, but it does not use jurors to make the decision.
In a Kaiser arbitration, the person bringing the claim (“Claimant”) and Kaiser both have lawyers, and the process is carried out much like a civil trial. Each side is required to present evidence and witnesses, including medical experts. There is no jury. The neutral arbitrator acts as both the judge and jury. The arbitrator decides the case based upon his or her interpretation of the law and the evidence presented. The decision of the arbitrator is final, legally binding and enforceable in court.
In a typical medical malpractice case heard in court, either side can appeal to an appellate court, or in some cases, the California Supreme Court. In a Kaiser arbitration this not possible. If the arbitrator reaches the wrong decision, that decision remains in place. The decisions of Kaiser arbitrators, with rare exception, cannot be challenged or changed. There is no right of appeal in a Kaiser arbitration.
Because arbitration decisions are final, it is critically important that a patient suing Kaiser have a lawyer with a proven track record in both traditional medical malpractice cases and Kaiser arbitrations. The lawyer or law firm must be experienced, understand the arbitration process, know the arbitrator and have the economic ability to advance whatever costs are necessary for expert retention and case prosecution.
Can I avoid arbitration and sue Kaiser in court?
In the overwhelming majority of cases, the Kaiser contract complies with California statutes regarding arbitration clauses. Under current California decisional law, our Supreme Court has upheld the validity of the Kaiser arbitration agreement.
In other states, such as Hawaii, the validity of agreement has been successfully challenged. Whether or not the Kaiser arbitration agreement is valid depends on state law. Kaiser now provides insurance in more than 10 states. In some of those states, arbitration cannot be forced on the patient. In California, it can.
If you are a California Kaiser member your HMO contract almost certainly includes the Kaiser Arbitration Agreement which has been upheld by California Courts as legal and binding.
Where will the arbitration be held?
Arbitration hearings in Kaiser cases are not held in a courtroom or courthouse. Instead, they are held in a private office or a private conference room. The proceedings are confidential. There is no public record of what takes place.
While a court reporter is permitted, in most cases there is no written record of what takes place. Under the rules of procedure, Kaiser arbitrations are held in the county where the medical negligence occurred.
Are arbitration and mediation different?
Yes. They are completely different. Arbitration is a process where a neutral third person (or a panel of three persons) hears evidence and makes a final binding decision. Mediation, on the other hand, is a process where a facilitator attempts to help parties solve a dispute by way of mutual agreement, resulting in settlement.
The arbitrator in a Kaiser case is not there to assist the parties in negotiating toward settlement. He or she is exclusively a decision-maker. The arbitrator is a private judge whose decision is final. In mediation, the facilitator is called the “mediator.”
Unlike an arbitrator, the mediator proceeds in an informal manner, speaks to both sides privately, assesses the strengths and weaknesses of both sides’ cases, and may offer suggestions regarding value or the terms under which a voluntary settlement might be agreed upon. A mediator has no authority to enforce a decision on the parties.
Who is in charge of administering the Kaiser arbitration program?
The Kaiser arbitration system is overseen by an independent administrator. The independent administrator handles the administrative details of Kaiser’s private dispute resolution system. The OIA administers arbitrations between Kaiser Foundation Health Plan, Inc., and its California health plan members. Although hired and paid for by Kaiser, the OIA is an independent office. It is not part of Kaiser.
The current independent administrator is Sharon Oxborough. Her firm handles case filings, arbitrator selection and assignment, compliance with time limits, and enforcement of the Kaiser Arbitration Rules. She maintains a website at www.oia-kaiserarb.com.
What is the legal fee you charge for representation in a Kaiser case?
The law firm of Walkup, Melodia, Kelly & Schoenberger represents clients on a contingent fee basis. A fee is charged only if the case is successful and money is recovered. The maximum contingent fees applicable in medical negligence cases are set forth in Business & Professions Code §6146.
If it is determined that you have a meritorious claim, the team of Kaiser specialists at the Walkup firm will discuss an appropriate contingent fee agreement that provides for fees as set forth in the statute. If your case has merit, you will not pay hourly fees, but the fee will be deducted from any amount recovered.
Walkup Melodia advances the costs of prosecution, consisting of reasonably necessary expenses so you are not out of pocket. Consistent with applicable rules of ethics, our agreement provides that if we are unsuccessful and we do not recover anything on your behalf, you owe us nothing. You owe us a fee only if we are successful. That fee is paid out of the recovery.
How are neutral arbitrators selected?
The process for arbitrator selection is set to Kaiser rules. Typically, patients who wish to bring a claim against Kaiser must choose from a list of names maintained in the office of the Independent Administrator. The process for arbitrator selection is found in the Kaiser rules; specifically, rules, 16, 17 and 18. Those rules are set out below:
16. List of Possible Arbitrators
a. Within three (3) business days after the Independent Administrator has received both the Demand for Arbitration and the filing fee, or has granted a request for waiver of fees, it shall simultaneously send to each Party an identical List of Possible Arbitrators, along with the Application forms of and redacted Awards, if any, by each of the possible Neutral Arbitrators.
b. The List of Possible Arbitrators shall contain the names of twelve (12) persons. The Independent Administrator will choose the twelve (12) names at random from the Independent Administrator’s arbitration panel for San Diego, Southern or Northern California, based on the location where the cause of action arose.
c. Unless there is a ninety (90) day continuance pursuant to Rule 21, the Independent Administrator must receive the Parties’ responses to the List of Possible Arbitrators on or before the deadline date appearing on the List of Possible Arbitrators. This deadline will be twenty (20) days from the day the Independent Administrator sent the List of Possible Arbitrators.
17. Joint Selection of the Neutral Arbitrator
a. The Parties may all agree upon a person listed on the List of Possible Arbitrators. If they do, the Parties and counsel shall sign the Joint Selection of Neutral Arbitrator Form. Unless there is a ninety (90) day continuance pursuant to Rule 21, the Independent Administrator must receive the form by the deadline set out in Rule 16.c.
b. Rather than selecting a Neutral Arbitrator from the List of Possible Arbitrators, the Parties may agree to select another person to serve as Neutral Arbitrator, provided that the person agrees in writing to comply with these Rules. If the Parties collectively select a person not on the List of Possible Arbitrators, all the Parties and counsel shall complete and sign the Joint Selection of Neutral Arbitrator Form. Unless there is a ninety (90) day continuance pursuant to Rule 21, the Independent Administrator must receive the form by the deadline set out in Rule 16.c.
c. The Independent Administrator encourages Parties, if possible, to make more than one joint selection and requires the Claimant and Respondent to individually submit the List of Possible Arbitrators under Rule 18. If the person the Parties have jointly selected is unable to serve, the Independent Administrator will then first use other joint selection(s). If only one joint Selection was submitted, the Independent Administrator will then use the strike and ranked List(s) of Possible Arbitrators. If no such List was submitted, Rule 18.c shall apply, and the Independent Administrator will randomly select a possible Neutral Arbitrator from the List of Possible Arbitrators.
d. After the Independent Administrator has received these forms, it will send a Letter Confirming Service to the person who has agreed to act as Neutral Arbitrator, with a copy to the Parties.
18. Selection of the Neutral Arbitrator When the Parties Do Not Agree
a. If the Parties do not collectively agree upon a Neutral Arbitrator, the Neutral Arbitrator shall be selected from the List of Possible Arbitrators in the following manner. Claimant(s) and Respondent(s) may each strike up to four (4) names to which the Party objects and shall rank the remaining names in order of preference with “1” being the strongest preference. No name should be left blank. Unless there is a ninety (90) day continuance pursuant to Rule 21, the Independent Administrator must receive the forms by the deadline set out in Rule 16.c.
b. Regardless of the number of Claimants or Respondents, the Claimant(s)shall return only one list of preferences and the Respondent(s) shall return only one list of preferences. If they do not, Rule 18.c will apply.
c. Unless there is a ninety (90) day continuance pursuant to Rule 21, if the Independent Administrator does not receive a response from a Party by the deadline set out in Rule 16.c, all persons named on the List of Possible Arbitrators shall be deemed equally acceptable Neutral Arbitrators to that Party.
d. At any time before the Party’s response is due, a Party or representative may request to review further information, if any, which the Independent Administrator has in its files about the persons named on the List of Possible Arbitrators. Parties and their representatives may call the Independent Administrator at 213-637-9847 to request such information. The Parties and their representatives may review the information by going to the Independent Administrator’s office. If requested, the Independent Administrator will also send the information to the Party or attorney by mail or fax. Parties who request that further information be sent to them shall be responsible for the Independent Administrator’s cost of providing it, with no charge made for duplication of the first twenty-five (25) pages. Time spent requesting or waiting for the additional information shall not extend the time to respond to the List of Possible Arbitrators.
e. Working from the returned Lists of Possible Arbitrators it has timely received, the Independent Administrator shall invite a person to serve as the Neutral Arbitrator, asking first the person with the lowest combined rank whose name has not been stricken by either Party. If the person with the lowest combined rank is not available, the Independent Administrator will ask the second lowest ranked person who was not stricken by either party, and will continue until a person whose name was not stricken agrees to serve. When the Independent Administrator contacts the persons, it shall inform them of the names of the Parties and their counsel and ask them not to accept if they know of any conflict of interest. If there is a tie in ranking, the Independent Administrator shall choose at random a person from the list of those who are tied again.
How does Kaiser pick people to be arbitrators? How large is the list of possible arbitrators I can choose from?
The two methods of selecting a neutral arbitrator – strike and rank or joint selection – allow parties the choice to select anyone they collectively want. In recent years the majority of neutral arbitrators the parties jointly selected were from the OIA pool. The OIA has 272 neutral arbitrators in its pool. Forty percent of them, or 110, are retired judges.
The applications filled out by the members of the OIA pool show that 140 arbitrators, or 51 percent, spend all of their time acting as a neutral arbitrator. The remaining members divide their time by representing plaintiffs and defendants, though not necessarily in medical malpractice litigation.
What do arbitrators cost? Who pays the bill?
In most cases the fee for the neutral arbitrator is split between the parties. However under certain circumstances, in a one-person arbitration ( and if a claimant qualifies for a Superior Court filing fee waiver, is on SSI, food stamps or welfare ) Kaiser will pay the full cost of a neutral in a three arbitrator proceeding. Hourly rates charged by neutral arbitrators range from$150/hour to $900/hour, with an average of $426.
For the 546 cases that closed in 2012 and for which the OIA has information, the average fee charged by neutral arbitrators was $6,403.67. The average fee in cases decided after a hearing was $24,353.98. Kaiser paid the neutral arbitrators’ fees in 90 percent of cases closed in 2012.
Can I arbitrate against Kaiser without a lawyer?
Yes, under the terms of the Kaiser Arbitration Rules, any member may proceed “in pro per” (representing themselves). However, this is a difficult and risky approach. Claimants were represented by counsel in 75 percent of the cases the OIA administered in 2012 (480 of 636). In 25 percent of those cases, the claimants represented themselves (or acted “in pro per”).
In 2012, for those cases which went through an arbitration hearing, where the patient decided to act as his or her own lawyer, Kaiser won 83 percent of the time. When a patient proceeds without a lawyer, he or she is often at a disadvantage because Kaiser uses medical malpractice defense attorneys whether or not the patient has hired a lawyer.
Further, in many cases where a patient/claimant proceeds without a lawyer, Kaiser wins on the basis of Summary Judgment before a formal arbitration hearing ever occurs. Kaiser submits declarations of experts to the neutral arbitrator, and a decision is rendered regarding the merits of the case without an evidentiary hearing ever having taken place.
Unless the case is obvious, straightforward and modest in the amount claimed, claimants should always first consult an attorney specializing in Kaiser cases to make an intelligent decision as to whether it is prudent to proceed without legal representation.
What sets the Walkup firm apart from other firms that claim to be Kaiser specialists?
We have handled Kaiser cases for more than 50 years. Our California personal injury attorneys consistently win accolades for achievement, including U.S. News & World Report Best Law Firms and Super Lawyers magazine.
In U.S. News & World Report, we are a First Tier Personal Injury Firm in California and a First Tier Medical Malpractice Firm in California. Senior partner Michael Kelly is an acknowledged leader in the litigation of cases on behalf of Kaiser patients, and has led seminars for other lawyers for the last five years dedicated to teaching other lawyers how to successfully prosecute Kaiser malpractice claims.
Every one of our partners has successfully arbitrated a claim on behalf of a Kaiser patient.
No other firm can say that.
How long do cases against Kaiser normally take?
From the time a client retains us, until the case is finally concluded, the average time it takes to bring a Kaiser claim to resolution is approximately 14 months. Some cases are resolved earlier, and, if they are more complex or involve issues of multiple medical specialties, may take longer. Under the terms of the Kaiser rules, a majority of cases are resolved by settlement, hearing or dismissal within 18 months of the date of filing. According to data published in 2013, the average time to disposition was 12 months.
Why do all medical malpractice cases require expert testimony if a mistake is obvious?
Medical malpractice claims are unique, and Kaiser claims are no different, when it comes to requiring expert medical testimony. Even if a mistake or medical error seems obvious, under current California law, the testimony of a medical expert is almost always required to prove medical malpractice. This is because the test for establishing medical malpractice is proving that a doctor or other health care professional did something that was “below the standard of care.”
Even if some act or omission by a medical professional is contrary to what is found in medical texts, books or articles, a licensed professional is still required to give admissible expert testimony on the point. This is one of the reasons that medical malpractice cases are difficult and expensive. In any medical malpractice case, including Kaiser arbitration claims, the claimant has the obligation to prove fault or culpability against Kaiser through convincing expert testimony.
If a Kaiser claimant does not have a medical expert, and Kaiser does, the patient will lose his/her claim.
What other witnesses besides medical experts are needed during the Kaiser arbitration process?
People who have knowledge about how an injury occurred (lay witnesses, as well as nurses, therapists and other hospital personnel), what the treatment has been (doctors and physicians assistants who have been involved in the treatment and recovery), what the damages are, and whether the treatment was within the acceptable standard of care, are all necessary witnesses at a Kaiser arbitration. In order to prove that the standard of care has been violated, expert witness testimony is required. An arbitration is no different than a trial in this respect. In order to prove damages, economic loss and rehabilitation costs, technical experts in fields other than medicine are required, especially if you are seeking damages for future lost wages, or for the cost of disability or future treatment.
Can friends or relatives attend my arbitration?
No. The Kaiser rules for arbitrating cases require that the hearings be private and confidential. In most cases, there is no formal record, and no court order. A strict interpretation of the rules of the Kaiser system excludes anyone other than the litigants and witnesses because the hearings are confidential. Only parties and their counsel, and participating witnesses, are legally permitted to attend.
Are children under the age of 18 bound by the Kaiser arbitration contract?
Yes. Adults and children, so long as they are health plan members, are both bound by the contractual terms of the Kaiser Arbitration agreement. California courts have held that parents have the authority to bind their minor children to the arbitration provisions. And in the circumstance where an unborn child is a claimant, because the mother has sustained an injury during the birthing process at Kaiser, California courts have held that the unborn child, who did not exist when the contract with Kaiser was entered into, is nonetheless bound by the arbitration requirements of the Kaiser contract.
Are newborns bound by the Kaiser contract?
Yes. Two California Court of Appeal decisions have ruled that unborn children become Kaiser members, subject to the Kaiser Arbitration Agreement, immediately upon their birth. The fact that the children themselves are not in existence when the contract was negotiated, or that arbitration was agreed to by the parents, has been held to be irrelevant.
The Walkup law firm has handled many cases against Kaiser for injuries occurring during the birth process. Walkup Melodia cases against Kaiser for obstetrical injuries have included claims on behalf of infants who suffering included hypoxic anoxic ischemia, cerebral palsy, brachial plexus injury as well as brain damage, blindness, paralysis and death.
In all these cases, it was determined that the infant plaintiff was governed by the Kaiser contract, and was required to arbitrate his/her claim, rather than bringing the claim in Superior Court in front of a jury. Birth injuries are subject to the arbitration provisions of the Kaiser contract.
What is the statute of limitations for a claim against Kaiser?
The general statute of limitations for medical malpractice in California applies to Kaiser and private doctors alike. Although Kaiser cannot be sued, the very same limitations period applies against Kaiser as would apply against any other health care provider in California. The statute of limitations for a Kaiser claim is contained in California Code of Civil Procedure §340.5.
In relevant part, that statute requires that an injured person take action within one year of discovering a medically caused injury and to demand arbitration, or extend the statute of limitations by sending a notice of intent to sue (sometimes referred to as “90 day letters”) under California Code of Civil Procedure §364. In the case of children under the age of 6, a claim must be filed within three years, or before the child’s 8th birthday, whichever is longer. Children over the age of 8 are bound by a three-year statute of limitations.
How do I determine if my claim has merit and should be pursued?
Evaluation of a medical malpractice claim against Kaiser involves review by doctors as well as lawyers. We need to obtain your records as well as any X-rays, CT scans, MRIs or other special studies. At Walkup, Melodia, we are privileged to have one full-time physician and a second part-time physician on our staff. Additionally, we have relationships with some of the finest doctors in the country at major teaching universities who assist us in evaluating potential cases.
Our lawyers know the Kaiser system, we know the lawyers who defend Kaiser, we know the typical ways that Kaiser attempts to deny payment, and we know many of the people who serve as arbitrators. We also have the economic ability to evaluate your case and obtain preliminary expert opinions without charging you, the client, for the cost of expert review.
If you have questions about the existence of a claim, the potential for success at arbitration, the ease or difficulty of resolution, the cost of litigating, or any other matter, you should call the law offices of Walkup, Melodia, Kelly & Schoenberger at 877-415-0964 or (415) 981-7210.
What percentage of Kaiser cases actually proceed to arbitration?
During 2012, 289 of the 622 cases settled. This represents 44 percent of the cases closed during the year. The average time to settlement was about a year. Withdrawn cases represented 26 percent of closures. Abandoned or dismissed cases made up another 6 percent and cases which Kaiser won on the basis of summary totaled 11 percent.
In 57 of these cases (79 percent), the claimant was in pro per. Failing to have an expert witness (20 cases), failing to file an opposition (30 cases), exceeding the statute of limitations (eight cases), and no triable issue of fact (14 cases) were the most common reasons given by the neutrals in their written decisions for granting summary judgment. As the foregoing makes apparent, the vast majority of Kaiser cases are resolved before arbitration; some are settled in mediation; others are settled without the intervention of a third party.
If I prosecute my case, how long will it take to reach resolution?
The time from beginning to end for most Kaiser cases is generally 12 to 14 months. Rule 24 of the Kaiser Rules for Arbitration requires that the majority of cases conclude within 18 months from the date an arbitration demand is received.
Who picks the arbitrator?
Once arbitration is demanded, Kaiser’s lawyers and your lawyers are each provided with a list of 12 names. Each side is allowed to strike a specified number of names, and to rank, in order of preference, the remaining names. The Office of the Independent Administrator then compares the lists and selects that neutral who has not been “struck” by either party and who is the most highly ranked by both sides.
Are there limits on recovery against Kaiser?
Yes. The same limits on recovery that apply in all other medical negligence cases in California are applicable to Kaiser arbitrations. The most unfair limit on recovery is the $250,000 “cap” on general (“noneconomic”) damages for pain, suffering and inconvenience called MICRA.
In 2014 there will be a ballot initiative to change this outdated and extremely unfair limit on full recovery for medically caused harm. Regardless of how badly a person is hurt, the maximum amount any one person may recover for pain and suffering, disfigurement, embarrassment or other intangibles, is $250,000.
This statutory limit (or “cap”) has existed in California for more than 38 years and has never been increased for inflation or to reflect increases in costs of taking care of victims. This unfair limit has been upheld as constitutional by California courts even though similar artificial limits have been thrown out in other states.
Additionally, in Kaiser arbitrations you are not allowed to recover your costs of suit if you are successful. In a civil trial a prevailing party may be able to recoup some of the cost of taking that matter to trial. This is not an available remedy in the Kaiser system.
Can Kaiser terminate my health plan or refuse to treat me if I demand arbitration?
No. Kaiser does not have the right to terminate a health plan member’s coverage or limit his or her treatment or coverage because he or she brings a claim. Termination of a member’s health plan coverage in retaliation for asserting a claim would be both a breach of contract and a separate, distinct, actionable wrong. Most Kaiser members who prosecute claims against the health plan continue to receive treatment for their medical needs while the arbitration/litigation process is ongoing.
How much have Kaiser claimants won when they have brought arbitration claims?
In 2012, 28 cases resulted in awards to claimants. One claimant was awarded $2,528,570. The range of relief was $8,550 – $2,528,570. The average amount of an award was $362,161. The median was $258,913.
Get Answers Specific To Your Situation
The prospect of challenging a health care behemoth such as Kaiser can be daunting. Fortunately, you don’t have to navigate the process alone. At Walkup, Melodia, Kelly & Schoenberger, we have an unmatched record of success representing injury and malpractice victims against Kaiser.
The first step is to speak with us about your potential claim during a free initial consultation. To get started, contact us online or call us directly at (415) 981-7210. Based in San Francisco, we handle claims against Kaiser throughout California.
