Healthcare Business News

California fines Kaiser $4M for violating mental health laws

By Joe Carlson
Posted: June 25, 2013 - 6:45 pm ET

The Kaiser Foundation Health Plan was fined $4 million by the state of California for failing to correct violations of mental health laws, including publishing materials that wrongly said the organization could deny long-term mental healthcare services to some plan enrollees.

The health plan, which is part of the giant, not-for-profit Kaiser Permanente integrated delivery system, also was accused of violating state law by making some patients wait more than 14 days for an initial mental-health appointment. And it was accused of keeping data in ways that made it impossible to tell whether the plan was meeting its obligations to offer mental health appointments to patients quickly enough under the law, according to a 23-page deficiency report (PDF) issued by the California Department of Managed Health Care.

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“The department's actions are a result of both the seriousness of the deficiencies and the failure of Kaiser to promptly correct them,” state managed care Director Brent Barnhart said in a statement.

The complaint said the issues surfaced during a routine review of the health plan that began in January 2012. The department concluded in March 2013 that Kaiser had not corrected the deficiencies found in the inspection. On Monday, it issued a formal accusation that laid out the violations and the $4 million fine (PDF). A follow-up inspection is planned for October.

Kaiser officials have not said whether they will contest the fine or pay it. In a March 2013 letter to plan members (PDF), Kaiser executives admitted that the state's findings “matched our own investigation” and pledged to make changes. Those included changing “outdated or incomplete” information on the availability of services to enrollees, and increasing the number of providers and new appointments.

Kaiser said it was also working with the labor union that represents its psychologists and social workers, the National Union of Healthcare Workers, to resolve the issues and improve wait times for plan members.

In public statements, the union took credit for triggering the investigation through the publication of a 34-page report (PDF) on what it called the health plan's “failure to provide timely and appropriate mental health services.”

“This action confirms what every Kaiser clinician knows,” psychologist Andris Skuja said in a union news release. “Kaiser doesn't take mental healthcare for its patients seriously. 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.”

Kaiser officials said they will contact state officials to discuss the $4 million fine, which the system viewed as "unwarranted and excessive" in light of the system's ongoing efforts to resolve the issued outlined in the report.

"We have been fully engaged for more than a year in the work to improve the timeliness of initial, non-urgent appointments and recordkeeping. Each of the findings in the 2012 DMHC survey has already been corrected, or is very far along toward resolution. For example, the handful of outdated or incomplete brochures and other materials describing our mental health services identified in the survey were updated or removed last year," a system statement says. "Importantly, the DMHC survey did not identify shortcomings with members' ability to receive urgent or emergency mental health care. Further, the survey did not identify problems with the quality of mental health care that our professionals provide to our members. In fact, the quality of the care provided by Kaiser Permanente clinicians continues to be recognized and commended by independent organizations across the country."

Follow Joe Carlson on Twitter: @MHJCarlson

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