Kaiser Permanente Ineligible to Participate in Obamacare Insurance Exchange in California

Emeryville, California — Kaiser Foundation Health Plan, Inc., the biggest HMO in California and one of the biggest in the country, should not be allowed to participate in the new insurance exchange being set up under Obamacare in California next year since it fails to meet the required standard of “good standing” spelled out in the exchange’s “Qualified Health Plan Contract.”

Section 3.02 of Covered California’s contract requires that during the year preceding entrance into the agreement, contracting health plans be in “good standing,” which it defines as “the absence of any material statutory or regulatory violations, including penalties” by the Department of Managed Health Care (DMHC).

Last month, Kaiser was assessed a penalty of $4 million by DMHC for what the regulatory agency calls “serious deficiencies in providing access to mental health services” that violate Health and Safety Code section 1374.72; California Code of Regulations, Title 28, Section 1300.67.2.2(c) and (d); and California Code of Regulations, Title 28, Section 1300.67(f)(8).

In addition, in June, the DMHC cited Kaiser for five more violations of state law, including failure to ensure that its utilization management practices are “consistent with sound clinical principles and professionally recognized standards of practice,” failure to properly notice policyholders of denials of service, and failure to ensure compliance with state regulations governing coverage of reconstructive surgery. In one case cited by the DMHC, Kaiser unlawfully told the parents of a patient that removal of a cyst on their son’s face was “cosmetic” and not covered by their insurance policy.

The unambiguous language in the insurance exchange’s contract clearly disqualifies Kaiser.

Yesterday, the National Union of Healthcare Workers sent a letter to the directors of Covered California, alerting them to Kaiser’s ineligibility under the exchange rules.

DMHC’s $4 million fine against Kaiser — the second largest in the agency’s history — was the result of a state investigation sparked by a report compiled by NUHW-represented mental health clinicians at Kaiser that identified numerous violations of California laws requiring “timely access” to care by patients.

Instead of seeking guidance from its mental health care providers who have long advocated for increased staffing to rectify Kaiser’s deficiencies in care, Kaiser has begun to intimidate and punish clinicians for advocating for patients and for simply doing their jobs.

Last week, after conducting a telephone triage assessment on a patient, Dr. Alex Wang, a psychologist at Kaiser Fremont, wrote in his notes, “pt should be seen sooner” than his scheduled appointment for three weeks later. Kaiser management disciplined Dr. Wang’s for writing this clinical note, calling it a “political statement.”

Read NUHW’s letter to DMHC on Kaiser’s retailiation against Dr. Wang: http://nuhw.squarespace.com/storage/docs/NUHW-ComplaintToDMHC_OnKaiser7-31-13.pdf

Read NUHW’s letter to California Attorney General Kamala Harris requesting an investigation of Kaiser’s apparent violation of whistleblower protection laws: http://nuhw.squarespace.com/storage/docs/NUHW-ComplaintToAttyGeneralOnKaiserRetaliation7-31-13.pdf

“Kaiser doesn’t take mental health care for its patients seriously,” says Dr. Andris Skuja, PhD, a psychologist at Kaiser. “Our patients have serious needs. The last thing they need is for their care to be illegally curtailed by an HMO that’s already making billions in profits, just so Kaiser can make a few more pennies on the dollar at patients’ expense.”