(Story updated at 8:57 p.m. ET)
Kaiser Permanente faces more than $2.5 million in penalties for its alleged failure to supply California state regulators with properly formatted claims data from Kaiser's Medicaid managed-care plans.
Kaiser was already in hot water with the state last year over failing to meet a June 30, 2016 data submission deadline, according to a letter the California Department of Health Care Services agency sent to Kaiser.
The following September, the state agency imposed a corrective action plan on Kaiser, giving it until Jan. 1, 2017, to comply.
It didn't, according to the state, and, per the corrective action plan, the DHCS sent Kaiser a formal notice it intended to seek the penalties for noncompliance.
The penalties cover two areas of concern.
One, for $742,500, involves encounter data for external medical claims formatted for submission via the agency's Post Adjudicated Claims and Encounters System for 2014 through 2016.
The other, for $1,792,500, covers late claims in the same PACES format for physician-administered drugs for March 2010 through March 2015.
The department, California's largest payer of healthcare claims, oversees programs that cover 13.5 million Californians, according to its website.
About 80% of enrollees in Medi-Cal, the state's Medicaid program, receive care from a Medicaid managed-care plan.
According to the letter, Kaiser has taken corrective action.
The state missive said it reserved the right to impose additional penalties for other data reporting deficiencies, and suggested Kaiser could face those additional penalties if the CMS orders the state to repay reimbursements due to the data shortfall.
The missing records include data on patient demographics, the provider's national identifier as well as coded information such as encounter type, diagnosis and various procedures, according to Sarah Brooks, deputy director of healthcare delivery systems for the DHCS.
The penalties, to be deducted from Kaiser's reimbursements, won't be reduced even after the healthcare system comes into compliance, Brooks said, adding, “We could see additional sanctions or penalties. It depends on them coming into compliance.”
California's data deficiencies in physician-administered drugs have come under federal scrutiny, and though the DHCS hasn't been contacted by the federal government about them directly, California was specifically called out in a recent report by the Office of Inspector General at HHS, Brooks said.
About 700,000 Medi-Cal managed care beneficiaries are assigned to Kaiser, Brooks said.
Brooks said the drill is for the state agency to provide technical assistance first, then impose a CAP, before subjecting an organization to penalties.
Thus far, Kaiser is the first contractor to take a hit for non-compliance, but may not be the last.
“Kaiser is not the only one,” she said. “We have not imposed financial settlements on those others.”
Kaiser's administrative systems and processes “had not been originally designed or fully updated to collect and report certain data in the format specified by DHCS,” said Nate Oubre, vice president for MediCal, CHIP and charitable care at Kaiser Permanent. The organization has been making investments in technology that will facilitate compliance with the state's data reporting requirements, Oubre said.
He stressed this problem was limited to the reporting of administrative data “and is in no way related to quality, patient care or patient access.”