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How Kaiser Used An Anti-Consumer Clause To Skirt Payment For Fatal Cancer

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"How Kaiser Used An Anti-Consumer Clause To Skirt Payment For Fatal Cancer"

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Maui high school teacher Michael Siopes had a rare, aggressive, and fatal form of cancer that Kaiser, his insurance provider, had never treated before. His Kaiser physician said he would have to do an “internet search” to figure out a treatment plan, but that he likely had a month to live. Siopes found a specialist at Duke University, and, with his Kaiser doctor’s referral, underwent successful treatment that eliminated his treatment.

After the time-sensitive treatment was complete, however, Kaiser refused to pay the $250,000 bill, saying it was “elective, non-emergency, non-urgent care” and that Kaiser could have provided the treatment in-house. That was enough of an alleged injustice. But as in all access to justice cases, that is where Siopes’ story begins, not ends. Siopes learned that, like countless consumers and employees, he could not sue in court, because he was subject to an arbitration clause.

Boilerplate arbitration agreements can be fraught with injustice in many scenarios. They bind consumers and employees with no bargaining power to agree to provisions in boilerplate contracts that limit their remedies, appeal options, and can contain other restricting provisions. The U.S. Supreme Court has nonetheless upheld these contracts in case after case, constricting individuals like Siopes who believe they were wronged by major corporations.

But in Siopes’ case, he had not even signed a contract that contained the arbitration clause agreement. The agreement had been negotiated by his employer, which provided his insurance. And he did not even know about the agreement until he went to challenge their coverage. This particular clause also limits the admission of certain evidence and witnesses, and includes secretive confidentiality provisions.

The resolution to this case seems obvious. But U.S. Supreme Court precedent has drawn few lines at how coercive arbitration clauses may be. In a rare stand against these clauses, the Hawaii Supreme Court drew the line at meaningful consent.

“In this case, the Enrollment Form that Michael signed did not reference the arbitration agreement and the record does not establish that Michael was otherwise informed of the existence of the arbitration agreement, much less that he assented to it. Thus, Kaiser has failed to demonstrate ‘unambiguous intent to submit to arbitration,’ and the arbitration provision is unenforceable as between Kaiser and Michael,” the court held.

As consumer lawyer F. Paul Bland wrote, “This is one of the best decisions I’ve seen all year.” At least Hawaiians who sign away their rights must have had the opportunity to read about it in the fine print.

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