Kaiser Mental Health Settlement
Kaiser Settlement Agreement Explained
The $200 million settlement agreement that was announced in October 2023 between Kaiser Permanente and the California Department of Managed Health Care is a major development that should result in Kaiser significantly increasing its staffing and improving access to mental health care.
Because this agreement is such an important victory in our 13-year struggle and because there’s so much material to digest, we have distilled it to four sections:
- An overview of the findings against Kaiser
- Kaiser’s Corrective Action Process
- A big-picture look at what the settlement means for us
- Media coverage of the settlement
An overview of the findings against Kaiser
BACKGROUND
The 46-page settlement agreement resolves two investigations launched by the Department of Managed Health Care (DMHC) in 2022.
AREAS OF CONCERN
The settlement agreement identifies seven “areas of concern” that Kaiser must address:
- Oversight
- Quality Assurance and Delegation Oversight
- Oversight of Medical Groups and Providers
- Oversight of Level of Care Appropriateness
- Access
- Timely Access and Network Adequacy
- Initiation of Care and Tracking First Appointments
- Follow-up Appointments and Wait Times
- Network and Referrals
- External Contracted Provider Network
- Adequacy of Higher Acuity Treatment Facilities
- Referrals to Out of Network Providers
- Grievance and Appeals
- Canceled Appointments during the NUHW Strike
- Mental Health Parity
- Communications and Advertising
SPECIFIC FINDINGS
Understaffing and Excessive Appointment Wait Times
The state found that the “lack of clinical staff has resulted in excessive wait times for enrollee individual therapy appointments, and has potentially contributed to a heavy reliance on group therapy…”
Wait times between non-urgent follow-up appointments
Kaiser data showed that wait times for non-urgent follow-up appointments averaged 21.4 business days (more than four calendar weeks) during the second half of last year — a clear violation of state law.
Out-of-Network Referrals
According to the agreement, Kaiser “relies on the Medical Groups to make out-of-network referrals, and the Plan has not exercised sufficient performance monitoring or continuous oversight to ensure appropriate access to out-of-network providers.” Kaiser was found to have routinely referred patients to its own external provider network even when the network could not offer timely appointments rather than refer them to non-Kaiser affiliated therapists, as required by the law.
Clinical Determinations
Kaiser told investigators that it uses the nonprofit clinical association criteria (LOCUS, CALOCUS, ASAM, ECSII, etc) to make medical necessity determinations, as required by the California Mental Health Parity Act. However, investigators audited 100 patient charts and found that none indicated the use of the nonprofit clinical criteria. Instead, Kaiser uses improper criteria to make medical necessity determinations, including Tridiuum’s BHI as well as AOQ, PHQ, GAD, and AUD.
One-appointment-at-a-time rule
In some service areas, Kaiser prohibits therapists and patients from booking a series of treatment appointments in advance even when indicated by patients’ treatment plans. According to investigators, this so-called “one-appointment-at-a-time” rule is illegal and a violation of the Mental Health Parity Act.
Violations during the 10-week Northern California Strike
During the 2022 strike, Kaiser canceled 111,803 individual and group therapy appointments, affecting 46,631 patients, according to investigators. Nearly two-thirds did not have their appointment rescheduled or their appointment was rescheduled outside of the legally-required 10-business day timeframe.
Kaiser’s internal grievance system
Investigators examined nearly 20,000 internal grievances filed by Kaiser members and found that Kaiser failed to resolve nearly one-third of them within the required 30-day timeframe.
Patient Charts
In reviewing enrollee medical records, investigators “observed a lack of documentation in enrollee charts and treatment plans.”
Lack of Higher-Acuity Treatment Facilities
Investigators found that Kaiser has an inadequate network of facilities to treat enrollees with higher acuity levels. In contacting 53 residential treatment facilities that contract with Kaiser, only 29 had availability within a week. Of 37 partial hospitalization programs (PHP) that contract with Kaiser, only 14 had an immediate availability or an opening within two weeks. Meanwhile, 12 responded that they were not actually a PHP.
Northern California’s Connect to Care (C2C) Program
Kaiser uses its C2C call center to split the intake process into two parts: a short initial call within 10 business days that Kaiser claims meets state timely access laws and then a longer secondary intake by a treating clinician that often doesn’t occur for several weeks. Investigators found this system causes patients to “face significant delays and obstacles when seeking behavioral health therapy” and constitutes a parity violation since Kaiser doesn’t require patients with medical conditions to undergo multiple assessments before getting care.
Relationship between the Kaiser Health Plan and the Kaiser Medical Groups
Investigators found that Kaiser Foundation Health Plan “has exercised inconsistent oversight over the Medical Groups and has not always intervened when necessary to ensure compliance.” Moving forward the Health Plan will be required to have continuous access to data from the medical groups in Northern and Southern California to assess their performance and be fully engaged to intervene when necessary to ensure compliance.
Kaiser’s Corrective Action Process
$50 million fine
Kaiser was required to pay $40 million in fines within 10 business days of the signing of the settlement agreement. The remaining $10 million will be paid by Kaiser only if, after the two-year corrective action process, the Department of Managed Health Care finds that Kaiser failed to meet its obligation under the Settlement Agreement.
If Kaiser fails to comply with the agreement, it could face additional penalties or oversight.
$150 million investment in mental healthcare initiatives
Kaiser must spend an additional $150 million on mental health initiatives over the next five years. Kaiser can determine how to spend the money, but the expenditures must be intended “to expand and improve behavioral health for (Kaiser) enrollees and for community members throughout California, including developing and implementing new models of care, investing in partnerships and training to expand access to care.”
Corrective Action Process
The settlement agreement requires Kaiser to develop and implement a “corrective action work plan” during the next two years in order to correct the problems identified in the agreement. The period can be extended if Kaiser doesn’t complete the plan within two years.
Timeline for corrective action
By February 1, 2024, Kaiser is required to hire an outside consultant “to develop a work plan to address the Corrective Action Areas.” The work plan “will set forth corrective actions, performance measures, reporting provisions, timelines, deadlines, deliverables, benchmarks, and expected outcomes.” The consultant will also help Kaiser to implement the work plan and report to DMHC.
Progress reports
During the two-year correction action period, Kaiser’s consultant will provide the Department of Managed Health Care with quarterly progress reports. Additionally, the agency will conduct quarterly meetings with Kaiser and its consultant to review Kaiser’s progress.
Follow-up
After the two-year corrective action period is complete, the Department of Managed Health Care will conduct a follow-up survey to determine whether Kaiser is now in compliance with state parity law.
If the agency finds violations during its follow-up survey, it can impose additional fines and penalties. The agreement notes that the state agency “may utilize any means necessary” to ensure Kaiser’s compliance with state law governing HMOs.
A big-picture look at what the settlement means for us
Q: What makes this such a big deal?
A: The Settlement Agreement is a validation of the concerns we’ve been raising for years in complaints to Kaiser as well as state and federal regulators. Additionally, the scale of the fine — the largest in the history of the California Department of Managed Health Care — underscores the scope and severity of Kaiser’s violations as well as the urgency with which Kaiser must address them.
As the Corrective Action Process gets underway, it’s important to keep in mind that we’ve reached this point because of the work we did — not just demanding change from Kaiser, but also pressing the state to do its job. The Settlement Agreement is not necessarily the end of that struggle, but it’s a great step forward.
Q: An earlier state-mandated corrective action process, initiated in 2017, didn’t produce enduring improvements in Kaiser’s behavioral health services.Why will this process be different?
A: Nothing is guaranteed. We must continue our therapist-led oversight of Kaiser’s services by identifying problems, reporting issues to stewards and staff, and documenting problematic practices. In many respects, we have a better capacity to see inside Kaiser’s systems and to identify problems that need addressing.
Q: What can we do to make sure the Corrective Action Plan is meaningful and effective?
A: We’re working with state officials and legislators to make sure the Department of Managed Health Care has the resources to fully enforce the settlement agreement as well as state parity laws.
Additionally, we can help by documenting instances when Kaiser isn’t meeting its legal requirements. For example, the Settlement Agreement describes Kaiser’s failure to use the nonprofit clinical association criteria (LOCUS, CALOCUS, ASAM, ECSII, etc.) to make medical necessity determinations as required by state. Our ability to document these instances can help ensure that Kaiser abides by the Settlement Agreement and stops this illegal practice.
In the weeks ahead, we’ll provide more information about Kaiser’s responsibilities and the rights of clinicians to make sure that Kaiser is in compliance.
Q: What might this mean for future contract negotiations?
A: Our contract in Southern California expires in 2024. We can’t say how Kaiser will approach bargaining, but, in light of the Settlement Agreement, we have a better chance to convince Kaiser that it would benefit from a more collaborative approach. No matter how Kaiser approaches bargaining, our success will still depend on our unity, determination and readiness to strike, if necessary. Only with everyone’s maximum involvement and commitment can we win our best-ever contract — an agreement that fully addresses our needs and those of our patients.
Q: Could there be unforeseen changes stemming from the Settlement Agreement?
A: Undoubtedly. Kaiser will have to address multiple deficiencies in its service model. In Northern California, Kaiser has already announced it will be restructuring triage services, which will definitely impact the current triage staff. Since we’ve been working in collaboration with Northern California management over various adjustments to the current Model of Care, it’s our hope they will continue to work collaboratively with us on the implementation of any changes necessitated by the settlement agreement. In Southern California, we hope the Settlement Agreement motivates management to start working collaboratively with us, but if they still don’t want to work together, we will make them bargain over any intended changes, as required by state law.