Imposing the second-largest fine in its history, the California Department of Managed Health Care on Tuesday slapped Kaiser health plans with a $4 million penalty for failing to provide mental health treatment in a timely manner.
The department also issued a cease and desist order to Kaiser, forbidding the health plan from continuing practices in violation of state law, which ensures equal care for mental and physical health.
An investigation that started in 2012 found that Kaiser's written description of its mental health services was so complicated and misleading that it "could dissuade an enrollee from pursuing medically necessary care."
Kaiser Permanente officials responded Tuesday by saying improvements are under way, and they plan to challenge the fine as too stiff.
Only one other fine in the history of the department exceeded Kaiser's.
That was in 2008 when Anthem Blue Cross was hit with a $10 million penalty for wrongfully rescinding consumers' health insurance coverage.
"The amount of the proposed penalty is unwarranted and excessive, and is unnecessary to ensure our corrective actions," said John Nelson, vice president for Kaiser Permanente. "We will review this with the DMHC."
Three months ago, the department released a detailed report saying Kaiser needed to see mental health patients more quickly and improve its public disclosures or face penalties.
It provided Kaiser with a laundry list of deficiencies to correct, including these examples:
A FAQ sheet for Kaiser in Northern California says: "We offer brief, problem solution-focused individual counseling. Research shows many people improve in a single visit. We do not offer long-term individual psychotherapy at Kaiser."
Kaiser's website for its Northern California Department of Psychiatry says: "In general, we do not begin treatment with individuals whose problems are of such a long-standing nature that short-term treatment would probably not be helpful. We will refer such individuals (elsewhere), although this treatment will not be a Kaiser-covered benefit and will not be paid for by Kaiser."
Kaiser has failed to ensure that appointments for mental health care are offered in a timely manner, making patients wait too long between visits.
Managed Health Care officials said advising patients that long-term psychotherapy is unavailable violates the state's mental health parity law. The law says that mental illness must be treated on par with physical illnesses.
The investigation follows complaints in 2011 by the union representing Kaiser's mental health clinicians that Kaiser's mental health practices were deficient.
Last March, the department issued a report that contained serious findings but offered Kaiser the opportunity to correct them prior to being fined.
However, DMHC Director Brent Barnhart said Kaiser did not move fast enough to fix its problems.
"The department's actions are a result of both the seriousness of (Kaiser's) deficiencies and the failure of Kaiser to promptly correct them," Barnhart said.
For its part, Kaiser said it has been working diligently to improve its mental health care.
The health care giant pointed out that state regulators did not find fault with members' ability to receive urgent or emergency mental health services.
In addition, Nelson said, Kaiser has hired new providers to reduce the waiting time for appointments, and is recruiting more.
Nelson also pointed to data indicating that the majority of requests for initial therapist appointments are booked within 10 business days.
The state, however, said Kaiser made patients wait at least 14 days after an appointment before they could call to schedule another one, meaning a patient could not receive a treatment plan that was pre-scheduled for several individual appointments over a two- to three-month period.
Dr. Andris Skuja, a Kaiser psychologist, offered strong words in reaction to the news of the $4 million fine and cease-and-desist order.
"This action confirms what every Kaiser clinician knows," Skuja said. "Kaiser doesn't take mental health care for its patients seriously."
Kaiser has 7 million members in California.
For enrollees who have had problems accessing care, department spokesman Rodger Butler suggested they call the department's help line at (888) 466-2219.