Health care giant Kaiser Permanente has agreed to pay a $4 million fine to California’s overseer of managed health care following an 18-month battle with state officials over whether Kaiser blocked patients from timely access to mental health services.
The development came as a surprise to Kaiser mental health clinicians and others who were prepared to testify this week in an appeals hearing for Kaiser’s challenge to the state Department of Managed Health Care and the fault it found in Kaiser’s provision of mental health care services.
Among the problems identified in a March 2013 report by the department were long waitlists to see a mental health professional, duplicate sets of records with contradictory information about how long patients had to wait for an appointment and “inaccurate educational materials” for patients discouraging them from seeking medically necessary care.
Moreover, the department found that Kaiser was likely violating state and federal mental health parity laws. The California Mental Health Parity Act requires managed care providers to provide psychiatric services that are equal in quality and access to their primary care services.
Kaiser’s unexpected agreement to pay the full $4 million in fines came after weeks of talks with state officials on a settlement to reduce the financial penalty. The nonprofit network with 3.4 million members in Northern California and double that number statewide also faced a “cease and desist” order from the department to end the practices in question.
Department director Shelley Rouillard said state investigators will stay on the case, “conducting a follow-up survey to ensure the plan has corrected these deficiencies and is complying with the law.”
“I am committed to protecting California’s health plan enrollees and ensuring they get timely access to all medically necessary health and mental health care services and will continue to aggressively monitor and take action against health plans that violate the law,” Rouillard said.
Kaiser Permanente’s public statement on their new position put a decidedly positive spin on their case outcome, with the first sentence reading, “We are very excited to announce today a comprehensive effort to improve the experience of our members, patients, and purchases in the area of mental health care.”
Kaiser vowed, among other steps, to “maximize the benefits of KP’s integrated system, so that mental health and primary care are appropriately connected, and our members’ mental health needs are not addressed in isolation from the rest of their health care.”
The statement, however, went on to disagree with many of the department’s findings and defended the quality, if not the accessibility, of Kaiser’s mental health cares services. “The DMHC did identify some areas where our initial nonurgent appointment wait times and data tracking needed improvement. ... We acknowledged that we could have better access and we have in fact improved our access.”
Still, Kaiser faces three class-action lawsuits filed on behalf of patients for denial of mental health care services. On top of that, the huge health care system must await the outcome of whistle-blower retaliation complaints some Kaiser psychologists filed with the California attorney general’s office.
Before Kaiser attorneys abruptly abandoned their legal appeal of the state’s penalty late Monday, interested parties expected a weeks-long, extensive hearing with both sides testifying. It was after losing a request to keep many of the proceeding’s documents private that Kaiser announced it would pay the full fine.
Administrative Law Judge Ruth Astle’s ruling to keep records open to the public followed her earlier denial of Kaiser’s request to keep the entire hearing closed to the public and seal all records and documents.
The fine is the second-largest in the history of the state’s Department of Managed Health Care, which works to protect the rights of managed care consumers to equal access to both mental and physical heath services. In 2008, the department fined Anthem Blue Cross $10 million for wrongfully rescinding customers’ health insurance coverage.
Reacting to the outcome of the case, the union representing at least 2,500 mental health professionals working within Kaiser’s health care system had praise for the psychologists willing to come forward to testify that Kaiser’s staffing levels are allegedly too low to handle patients’ demand for mental health services.
“Obviously, from our point of view, these clinicians came forward out of a sense of courage. They are in this career to help patients, and they want those patients to have access,” said Sal Rosselli of the National Union of Healthcare Workers.
Editor’s note: An earlier version of this story misstated membership of the union representing Kaiser’s mental health professionals. The correct number is at least 2,500.