Houston Chronicle
Power tale: Mugging Dr. Welby
By RICK CASEY
Feb. 5, 2005
A recent study showing that homebuilders have contributed $9 million to state officials in the past four years raised a simple question.What are they getting for their money?

The Austin-based reform organization that conducted the study, Campaigns for People, accused legislators of responding by setting up the Texas Residential Construction Commission.

The reformers say this commission, headed by gubernatorial appointees, most of whom have ties to the industry, is a cruel hoax on homebuyers.

Homebuilders disagree, saying the commission provides a fair process for disputes that keeps people out of court.

Whichever it is, I think homebuilders should get more than one bureaucracy for $9 million.

Maybe they did.

In the spring of 2001, the Texas Medical Association and the state's hospitals asked the Legislature to pass the "Prompt Pay" bill. It required HMOs and other insurance companies to pay undisputed medical bills within 45 days or face stiff penalties.

A shocking veto

On June 4, Gov. Rick Perry gave an address to the Texas Hospital Association.

"Isn't it time that you worried more about providing the right care than getting paid in a reasonable amount of time?" he asked the gathering. "I think it's time for us as a state to strengthen our laws and regulations, which we did this last session, to require prompt payment of a physician or other health care provider."

Imagine the surprise of those hospital executives and of doctors when Perry vetoed the bill 13 days later.

What happened? On June 8, Richard Weekley, a Houston real estate developer (and part owner of his brother's David Weekley Homes), wrote a letter to Gov. Perry.

The letter was on the letterhead of Texans for Lawsuit Reform, of which Weekley was president. Weekley asked the governor to veto the bill.

Why? Because of a provision in the bill that would prohibit insurers from requiring all disputes with medical providers to be settled by binding arbitration.

The doctors and hospitals wanted such language because HMOs and insurance companies were forcing them to agree to mandatory arbitration. If they didn't agree, the insurance companies would not put them on approved lists for full payment, thereby depriving them of patients.

Doctors, who aren't generally fond of lawsuits, didn't like mandatory arbitration for a number of reasons. The insurance companies knew the individual arbitrators better (some contracts barred doctors from disclosing arbitration results to other doctors). Well-paid arbitrators looking for repeat business would be hesitant to rule consistently against insurers, and their decisions could not be appealed no matter how unreasonable.

Doctors would be free, under the bill, to agree to arbitration or other avenues after a dispute arose. But Texans for Lawsuit Reform officials say it's very difficult to get people to arbitration after a dispute arises.

"No public policy is served by mandating that a contractual dispute must be pursued in the court system when the parties to the contract desire to agree otherwise," Weekley wrote to Perry.

Weekley's argument was backed up by the fact that members of Texans for Lawsuit Reform were Perry's single largest contributor bloc, having donated $3.2 million to him, according to an August 2001 analysis by the Dallas Morning News.

Leaving nothing to chance, prominent TLR members threw money at Perry in the period between the close of the session (when contributions are banned) and the deadline for vetoes.

Houston homebuilder Bob Perry (no relation to the governor) sent in $50,000. Others sent checks for $25,000.

Ironically, doctors and the Texas Medical Association had been part of TLR, but nobody had raised the issue with them. They felt they had been mugged by their friends.

TMA leaders were so outraged that though doctors traditionally lean Republican, they endorsed Perry's opponent the next year, Democrat Tony Sanchez.

It is a testament to the power of Texans for Lawsuit Reform that they could get the governor to anger the doctors. But why would TLR go to the mat over that one clause?

Is it because most homebuilding companies make compulsory arbitration a condition of buying a house?

"They saw it as the camel's nose under the tent," said one doctor.

Ken Hoagland, lobbyist and spokesman for TLR, disagrees.

"That's just spin," he says. "Weekley's a homebuilder, but homebuilders' perspective hasn't had any impact at all on the TLR point of view. We have a much broader perspective.

"It's a policy question," he said. "Can you outlaw alternative dispute resolution? Is that a good idea?"

Unsaid: If you let doctors reject mandatory arbitration, someone might get the idea of letting homebuyers reject it.

Avoiding that is worth mugging Marcus Welby, M.D.

You can write to Rick Casey at P.O. Box 4260, Houston, TX 77210, or e-mail him at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .