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A NATIONAL ARBITRATION association is shining a spotlight on the importance of fair and effective alternative dispute resolution mechanisms for assuring managed care satisfaction and quality care.

The group, the American Arbitration Assn., has outlined proposals for a new policy on health care-related arbitrations and mediation that should serve as a model for dispute resolution procedures followed by health plans.

While the association has its own reasons for considering a new policy, which has not yet been adopted by the organization, its timing comes as Congress considers legislation that would require health plans to adopt new claims review procedures, among other things. That federal legislation is sparked partly by consumer outrage of perceived and actual flaws in how managed care plans handle enrollees' grievances.

We would hope that health plans consider adopting all or part of the American Arbitration Assn.'s proposals, regardless of the threat of a federal law. Such a move would be an important step toward boosting participant satisfaction and improving the dim perception the general public has of managed care plans.

While some managed care plans no doubt have excellent and responsive mechanisms for resolving patient complaints or claims disputes, it is just as certain that others have systems that are poorly communicated, take too long and, in some cases, are stacked in favor of the health plan.

Such was the case with a mandatory arbitration program employed by Kaiser Permanente that was at the center of a 1997 California Supreme Court ruling. The court ruled that there was evidence to support a claim Kaiser intentionally delayed scheduling an arbitration in the case of a man with lung cancer. The claimant died before his dispute could be heard (BI, July 7, 1997). The case was remanded to a trial court to determine whether the HMO committed fraud in the delay.

That case was cited by the American Arbitration Assn. as one factor in its decision to propose new guidelines for how arbitrations should be handled, including its refusal to participate in programs in which arbitration is mandated, rather than offered as an alternative to the courts.

The association's proposals, which do not pertain to malpractice allegations, also would include: action within 24 hours on disputes involving emergency care; allowing claimants to be represented by a lawyer; allowing claimants to review medical charts; and assuring potential damages in an arbitration would be identical to what could be obtained in court.

In all, there is much to like in the association's proposals. The proposals clearly are designed to make arbitration an attractive alternative to taking a dispute to court. And alternative dispute resolutions such as arbitration are almost always going to be less expensive and faster for all parties than the legal system.

As the Kaiser case shows, though, an arbitration plan can be worse than no plan at all if it is abused or structured in such a way as to tip the scales in the health plan's favor. The program must be set up to handle claims quickly and fairly, and be clearly communicated to plan participants. Ideally, other, less formal dispute resolution mechanisms would also be available to handle simpler disputes and problems and streamline the process.

The key, of course, is making any arbitration program an attractive alternative to the courts. Adopting an equitable and efficient means of settling disputes, such as the system proposed by the arbitration association, will go a long way toward assuring satisfaction among plan members and less hostility and distrust of managed care from the general public.