Kaiser Permanente Fined Millions – Again

The California Department of Managed Health Care has fined Kaiser Permanente $3 million for haphazard investigations of questionable care, physician performance and patient complaints. Kaiser is California’s largest HMO with 29 medical centers and over six million members. While some equate more mistakes to the sheer size of the company, others seem to think that Kaiser just isn’t doing right by their customers, because this is…

Not the first time

This is not the first time that the Department has assessed a fine against Kaiser Permanente. In August 2006, Kaiser was fined $2 million for its improper handling of kidney transplant patients. In that instance, the company transferred patients from established kidney transplant centers to its own center. Hundreds of patients waited for months to receive new kidneys, but many never did because Kaiser mishandled the paperwork. Many patients died waiting and many others’ health was put at risk due to prolonged periods of dialysis. Kaiser closed its Northern California kidney transplant program in May, 2006.

Latest investigation and fine

According to the DMHC, the investigation of Kaiser’s quality assurance oversight programs, which are responsible for investigating and resolving quality of care complaints from its members, was partially prompted by issues identified in the Department’s examination of Kaiser’s San Francisco Medical Center kidney transplant facility and consumer complaints received.

The investigation reviewed programs designed to investigate complaints and conduct physician peer review at nine of Kaiser’s 29 medical center programs in California, including Woodland Hills, Fontana, Baldwin Park, West Los Angeles, south Sacramento, San Rafael, South San Francisco, Fresno and San Francisco.

California law requires health plans to establish procedures to review the quality of care, performance of medical personnel and utilization of services and facilities. Specifically, plans must have a proper oversight mechanism in place to ensure that any quality assurance or peer review functions it may delegate to another entity, such as a medical group, are adequately performed.

Investigation findings

The Department’s investigation found that Kaiser lacked adequate health plan oversight of quality assurance programs and had significant variation and inconsistent handling of quality of care cases referred for medical center peer review.

The Department reviewed 228 randomly selected peer review and quality assurance case files and found that one third of the files were deficient, such as making sure that corrective action was carried out on a quality complaint, timely and prompt handling of a quality concern or that a doctor’s complaint history was appropriately applied in evaluating a peer review matter.

Next steps

In addition to the $3M fine, the DMHC is requiring Kaiser to establish, among other things, new reporting processes at all 29 of its medical centers, a uniform set of standards for to evaluate peer review programs and a new regional Member Concerns Committee in southern California to report to the health plan on specific member complaints. There are additional requirements and the DMHC will follow up to make sure that Kaiser is complying. If they do comply, the DMHC has said that it may waive $1 million of the fine – something that is creating controversy in and of itself as the company’s income was over $30 billion dollars last year.

To view the information from the Department of Managed Health Care, go to: http://www.dmhc.ca.gov/library/reports/news/prkaiserqap.pdf.

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