The Kaiser Foundation Health Plan’s Office of the Independent Administrator (OIA) recently issued its annual report for 2020 regarding the mandatory arbitration system between Kaiser Foundation Health Plan, Inc., or its affiliates (Kaiser), and its members. The OIA received 490 demands for arbitration in 2020, down by 120 in 2019. Ninety-five percent (95%) of the cases involved allegations of medical malpractice. Claimants in 161 cases (33%) were not represented by an attorney, which was an increase from 2019.

The parties settled 45% of the cases. Thirty-seven cases settled at the Mandatory Settlement Meeting (MSM). Of the cases that settled at the MSM, one claimant was not represented by an attorney. Claimants withdrew 27% of the cases and abandoned 5% of the cases by failing to pay the filing fee or get the fee waived. Four percent (4%) of the cases closed after an arbitration hearing, 14% were closed through summary judgment, and 5% were dismissed by arbitrators.

Claimants prevailed in 26% of the cases with an average award of $491,076. The range of the awards was from $40,000 to $1,677,649. Claimants received compensation either when their cases settled (45%) or when they were successful after a hearing (just 1%).

All of the hearings involved a single arbitrator, which the annual report described as “neutral.” The OIA has 182 arbitrators on its panel, and 43% of them (79) are retired judges. Ninety-three percent (93%) of the arbitrators reported having medical malpractice experience. Fifty-seven percent (57%) of the arbitrators on the OIA panel served on a case. Twenty-two arbitrators, including arbitrators not on the OIA panel, decided the 24 awards made. Twenty arbitrators (91%) wrote a single award.

Kaiser paid the arbitrators’ fees in 94% of the closed cases that had fees. Hourly rates charged by the arbitrators ranged from $200/hour to $1,200/hour, with an average of $555/hour. For the 443 cases that closed, and for which the OIA had information, the average fee charged by the arbitrators was $7,495.

Cases closed, on average, in 356 days. Eighty-five percent (85%) of the cases closed within 18 months (the deadline for “regular” cases) and 61% closed in a year or less. Cases that were decided by an arbitrator making an award after a hearing closed on average in 660 days (22 months).

The annual report concluded: “The goal of the OIA is to provide an arbitration system that is fair, timely, lower in cost than litigation, and protects the privacy of the parties. To summarize: neutral arbitrators are selected expeditiously, and the cases close faster than in court; parties can, and do, disqualify neutral arbitrators they do not like; the filing fee is lower than in court, and parties can, and do, shift the costs of the neutral arbitrators to Kaiser; OIA arbitrations are confidential, and the OIA does not publish the names of individual claimants or respondents involved in them; neutral arbitrators on the OIA panel have plaintiff, defendant, and judicial backgrounds. The cases are distributed among them; neutral arbitrators and the OIA system receive positive evaluations.”

Source

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