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In construing a California statute that imposes notice requirements on health care arbitration agreements, the California Supreme Court held that once the notice requirements are satisfied, parties are "free to adopt" arbitration agreements with expansive reach. Accordingly, the Court found that an arbitration agreement entered into during an initial visit was applicable to a malpractice claim that arose from treatment received two years later for a different condition.
In Reigelsperger v. Siller, 150 P.3d 764 (Cal. 2007), Siller, a chiropractor, treated Reigelsperger for lower back pain in August 2000. During his visit to Siller's office, Reigelsperger signed an arbitration agreement. Article 1 of the agreement required arbitration of "any dispute as to medical malpractice," while article 2 provided that "[t]his agreement is intended to bind the patient and the health care provider . . . who now or in the future treat[s] the patient."
Two years later, in September 2002, Siller treated Reigelsperger for a different condition. Based on that treatment, Reigelsperger sued Siller for malpractice. Siller filed a motion to compel arbitration.
The issue underlying Siller's motion to compel was whether the arbitration agreement applied to a malpractice claim arising from treatment received two years later for a different condition.
Reigelsperger cited section 1295 of the California Code of Civil Procedure in arguing that the arbitration agreement did not apply. Section 1295 imposes notice requirements on health care arbitration agreements, and if the notice requirements are satisfied, the agreement "governs all subsequent open-book account transactions for medical services for which the contract was signed."
The trial court denied Siller's motion to compel arbitration on the ground that the second treatment was not a "subsequent open-book account transaction[]" within the meaning of section 1295. After the court of appeal affirmed that ruling, the California Supreme Court (the Court) granted review.
According to the Court, it was irrelevant whether the parties had an open-book account relationship because once the statutory notice requirements were satisfied, "the parties [were] free to adopt a broader arbitration agreement." Accordingly, the Court relied on article 2 and its reference to "future treat[ment]" in holding that the arbitration agreement applied to Reigelsperger's malpractice claim.
In reaching its holding, the Court explained that "[t]he purpose of section 1295 is to encourage and facilitate arbitration of medical malpractice disputes." The Court further explained that section 1295 was part of a legislative effort to combat the "skyrocketing" insurance premiums that were forcing many health care providers to discontinue high risk treatments and procedures.
With its streamlined procedures and the availability of decision makers who have health care expertise, arbitration offers efficiencies that enable health care providers to focus their energy on treating patients instead of resolving disputes. In its survey of the available studies, the General Accounting Office recognized the cost savings of health care arbitration. See U.S. Gen. Accounting Office, Medical Malpractice: Alternatives to Litigation (1992).
Pre-dispute health care arbitration agreements are readily enforced by some, but not all, arbitration providers. The National Arbitration Forum administers such arbitrations and provides discovery for medical malpractice claims. See Rule 29 of the National Arbitration Forum Code of Procedure. Other providers require a post-dispute arbitration agreement. See, e.g., American Arbitration Association Health Care Policy Statement. If the arbitration agreement in this case names one of those administrators, the agreement may be unenforceable despite the Court's ruling on its scope. See Deeds v. Regence Blueshield of Idaho, 141 P.3d 1079 (Idaho 2006).
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