Kaiser Permanente admits guilt — HMO denied patients access to mental health services

KaiserSeptember 9, 2014


Kaiser drops appeal, agrees to pay near-record $4 million fine for mental health care violations

Despite admission of guilt, nation’s largest HMO continues to violate state law and has not produced plan for correcting its faults

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OAKLAND, CALIF. — Kaiser Permanente admitted late Monday to violating state law and dropped its appeal of a $4 million fine levied against it last year by the California Department of Managed Health Care (DMHC) for “serious” and “systemic” violations that Kaiser committed in its mental health care services throughout California. Central to DMHC’s findings, Kaiser was required by state law to see patients within 10 days of requesting an appointment but many patients were forced to wait weeks. Some patients may have committed suicide as a result of the lengthy waits for treatment. Despite the admission of guilt by Kaiser, the HMO has not produced a plan to correct its violations, as required by the “Cease and Desist” order issued by the DMHC in June 2013.

“The DMHC demanded that Kaiser stop violating the law, yet Kaiser has continued to do so,” said Sal Rosselli, president of the National Union of Healthcare Workers, which represents the 2,500 mental health professionals who care for Kaiser patients at more than 100 facilities throughout California. “By paying the fine, Kaiser finally acknowledged its violations, but it has yet to take meaningful steps to correct the underlying problems in its mental health care system. Until Kaiser fully staffs its psychiatry departments with enough psychologists, therapists, and social workers to handle the ever-growing caseload and provide timely, quality care to their mental health patients, this crisis is far from over. Otherwise, the problem could grow worse as Kaiser adds hundreds of thousands new patients to its rolls in California and elsewhere through health care exchanges created by the Affordable Care Act.”

Over the past year, Kaiser clinicians have provided the DMHC with ample evidence that Kaiser continues to violate state “timely access” laws and the California Mental Health Parity Act, which requires HMOs to provide psychiatric services that are on par with their primary health services. Kaiser still faces three class-action lawsuits filed by patients and families who say Kaiser’s violations contributed to tragic outcomes, including suicides.

“Monday’s result is a vindication of what Kaiser mental mental health clinicians have been saying for years,” said Clement Papazian, a social worker at Kaiser’s Oakland Medical Center. “It’s an admission by Kaiser that it has knowingly violated California mental health laws and shortchanged its patients. The question of Kaiser’s guilt has been resolved. Now, Kaiser needs to fix the problems.”

For more than a year, Kaiser has claimed that the $4 million fine is excessive and that Kaiser has resolved the problems cited by the DMHC in its March 2013 report. In recent weeks, Kaiser failed to reach an out-of-court settlement with the DMHC, which would have avoided the prospect of Kaiser clinicians and patients publicly testifying about Kaiser’s violations in a hearing. On Monday, Kaiser dropped its appeal after Administrative Law Judge Ruth Astle denied Kaiser’s request to keep most of the relevant documents in the hearing private. This followed an April ruling by Judge Astle in which she denied Kaiser’s request to close the entire hearing to the public and seal all records and documents pertaining to it. Also on Monday, Judge Astle said that Kaiser’s star witness — a former DMHC prosecutor now in private practice as an advocate for HMOs — should consult with the DMHC regarding possible ethical breaches associated with testifying on Kaiser’s behalf.

With all signs pointing toward a difficult hearing, and with weeks of testimony lined up by the DMHC from Kaiser clinicians and enrollees who suffered harm as a result of the HMO’s violations, Kaiser dropped its appeal and paid the fine. The fine is the second largest in the DMHC’s history, but it’s just a drop in the bucket for Kaiser, which has made more than $13 billion since 2009 and is on pace this year to double last year’s record profits.