Kaiser Foundation Health Plan of Texas' worst public relations nightmare came to life last week.
State senators demanded and received a critical insurance department report that the HMO had kept under wraps for weeks.
The lawmakers got the report April 22 after learning that Texas Attorney General Dan Morales determined it didn't violate state confidentiality laws. The report was immediately distributed to local news outlets, which featured the report's accounts of botched care at Kaiser facilities as well as what appeared to be the HMO's extraordinary efforts to suppress critical information.
According to detailed accounts in the report, "Kaiser repeatedly denied and delayed payment of emergency care services*.*.*.*failed to comply with quality assurance, quality improvement, peer review and credentialing programs and procedures resulting in an unacceptable disregard for quality of care issues."
William Gillespie, M.D., president and medical director of the Kaiser plan in Texas, told MODERN HEALTHCARE, "We have researched thoroughly each one of the encounters described in the sensationalist draft report and in every circumstance the facts are not consistent with the allegations. The care we provided was appropriate."
Kaiser had entered an agreement with the insurance department just a day before. It thought the report wouldn't be released until after a lengthier review procedure.
But the Texas plan-a unit of the nation's largest HMO-provided more fodder to managed-care critics by fighting to suppress the report. Although Kaiser maintained the report should be kept from the public because it contains confidential patient information, no patients are identified in it. And to nonlawyers, the settlement might appear to involve a form of hush money.
In the settlement, Kaiser agreed to pay a $1 million fine and drop a lawsuit against the insurance department challenging the report. As part of the suit, Kaiser had won a restraining order in February preventing the report's release (April 7, p. 4).
The plan, with 124,000 enrollees, also agreed to make improvements in its operations with the help of a consultant and to borrow $80 million from its parent in 1997. The Texas plan lost $52 million in the past two years.
The insurance department in return agreed to ask the attorney general to determine whether the report contained confidential information. After that opinion, the report was to go back to the insurance department, which would decide what to release. Kaiser was to have had an opportunity to appeal that decision before the report was made public.
Gillespie said Kaiser would appeal Morales' decision in court in order to defend the confidentiality of patient and physician peer review records in the future. Under Texas law, patient information and information gathered in a physician peer review process is "sacrosanct," Gillespie said.
In California, meanwhile, another report-a state inspection of two of Kaiser's hospitals conducted on behalf of HCFA following several patient deaths early this year-won't be released to the public until Kaiser prepares a formal response after May 7. Kaiser announced that officials found five substantial deficiencies to correct, including staffing levels and documentation.
Kaiser said it's not going to reopen one of the hospitals, 50-bed Kaiser Richmond (Calif.) Medical Center, until it comes up with a new strategy to make the facility economically viable. Spokeswoman Katherine Saux said Kaiser can't afford to run the hospital because the census is too low.