Sacramento Business Journal: Kaiser ordered to stop denying access to some therapies

State regulators have ordered Kaiser Permanente to stop denying members access to physical, occupational and speech therapy services.

The cease-and-desist order — issued Monday by the California Department of Managed Health Care — follows member complaints that Kaiser denies coverage for these services for non-physical conditions such as developmental delays, stuttering and autism without determining medical necessity.

“Kaiser Health Plan’s policy to deny physical, occupational and speech therapy services for non-physical conditions is not permitted under the Knox-Keene Act,” Anthony Manzanetti, DMHC’s chief of enforcement, said in a news release. “The DMHC is taking this action to ensure Kaiser follows the law.”

Kaiser officials expressed surprise at the action.

“We have been in discussions with the department over these services and were already scheduled to continue our discussions later this week,” Kaiser spokesman John Nelson said in a prepared statement.

Under California law, health plans are required to cover medically necessary basic health care services, including speech, physical and occupational therapy. In addition, the state mental health parity law requires health plans to cover medical necessary diagnosis and treatment of certain mental health conditions.

Yet DMHC has received more than 100 complaints since 2009 from Kaiser members who were denied access to what DMHC considers medically necessary speech, physical and occupational therapy services because the enrollee has not suffered a physical condition triggering coverage under Kaiser guidelines.

California health plan enrollees who disagree with a plan decision about coverage have the right to receive an independent medical review of the matter. Many did on this issue, and the reviews determined the disputed therapy was medically necessary in more than 75 percent of the cases, cease-and-desist legal documents show.

DMHC officials “misunderstood or mischaracterized” Kaiser’s approach, Nelson said in his statement.

“Kaiser Permanente provides these clinical and medical therapies to our patients. These therapies are not limited only to patients with ‘physical conditions,’” he said. “We remain committed to discussing DMHC’s position with them and reaching a shared understanding. In the interim, we will continue to cover medically necessary health care services.”

The DMHC action was applauded Tuesday by the National Union of Healthcare Workers, which represents more than 2,200 psychologists, licensed clinical social workers, marriage and family therapist and other mental health clinicians in California.

The union — which is in the midst of contentious contract negotiations with Kaiser — released a report in November that blasts Kaiser for denying patient care for certain mental health conditions.

“DMHC’s action reinforces what we’ve been saying for months about Kaiser’s failure to provide its patients with timely and appropriate mental health services,” Clem Papazian, a licensed clinical social worker who works for Kaiser in Oakland, said in a statement.