Clinicians File Complaint Against Former Government Official for Assisting Kaiser Permanente During Mental Health Investigation

KaiserSeptember 20, 2013

NUHW’s Complaint with the Fair Political Practices Commission Questions Whether Marcy Gallagher Violated the Law by ‘Switching Sides’ During Investigation of Kaiser’s Mental Health Care

Sacramento – Today, the National Union of Healthcare Workers (NUHW) filed a complaint with the California Fair Political Practices Commission (FPPC) asking for a complete investigation of whether a former official in California’s Department of Managed Health Care (DMHC) who was charged with investigating Kaiser Permanente’s substandard mental health care illegally “switched sides” by assisting Kaiser during the investigation.
The official, Marcy Gallagher, was a top DMHC attorney and was responsible for leading the agency’s investigation into Kaiser’s patient-care violations, including the HMO’s illegal delays in caring for patients with depression, autism and other conditions. After leading the agency’s investigation for eight months, Gallagher resigned her government position and was hired by Kaiser, where she works for the Kaiser division that’s responsible for defending Kaiser against the agency’s investigation. At Kaiser, Ms. Gallagher reportedly trained Kaiser officials on how to answer questions posed by DMHC’s investigators. Next month, the agency plans to conduct site visits at Kaiser hospitals and clinics as part of its ongoing investigation.
In short, Ms. Gallagher went from directing the DMHC’s investigation against Kaiser to helping Kaiser fend off the very investigation that she spearheaded.
Additionally, documents indicate that a number of Kaiser’s top officials were aware of Ms. Gallagher’s highly questionable conduct, including Dr. Ben Chu, the president of Kaiser’s Southern California Region and a top national official at Kaiser.
NUHW’s complaint requests that the FPPC  immediately investigate whether Ms. Gallagher violated various provisions of California’s Political Reform Act including the “Permanent Ban on Switching Sides by State Officials” and the “Ban on Influencing Prospective Employment.” These provisions, detailed in NUHW’s four-page complaint, are intended to prevent private interests from corrupting the government by buying “insider” assistance from state officials. Kaiser is California’s largest HMO and has reported $10.2 billion in profits since 2009.
Currently, Kaiser is under heavy regulatory scrutiny for its mental health violations. After the first phase of the state’s investigation, Kaiser was fined $4 million for violating multiple provisions of state law, including the California Mental Health Parity Act and California’s Timely Access Regulations. The investigation was prompted by a complaint filed by NUHW, whose members include 2,500 psychologists, therapists and other licensed mental health clinicians who care for Kaiser patients at dozens of hospitals, clinics and emergency rooms across California.