Kaiser agrees to pay $4 million fine over mental health services

Ending a yearlong challenge, Kaiser Permanente will pay a $4 million fine levied by state regulators who accused the HMO of “serious deficiencies” in providing its members with timely access to mental health services.

The Oakland-based health care giant said it is withdrawing its appeal of the fine in part because it wants to focus on making improvements to its mental health services. It unveiled a series of initiatives Tuesday to improve the quality and availability of mental health services to its 7.3 million members in California.

“We wish to focus all of our energy on our continuing efforts to enhance mental health care for our members and meet their needs,” Kaiser spokesman Marc Brown said in a statement.

The state Department of Managed Health Care imposed the fine - the second-largest ever in the agency’s 14-year history - in June 2013. Regulators alleged Kaiser was not accurately tracking patients’ access to its therapists. The agency also said Kaiser could not ensure that patients were offered timely initial appointments with therapists for non-urgent matters, in violation of state regulations.

Kaiser challenged the fine, saying it was excessive and unwarranted. But it withdrew its appeal Monday night, hours before Kaiser representatives and state regulators were scheduled to give opening statements in a hearing Tuesday before an administrative law judge in Oakland.

The Department of Managed Health Care is conducting a follow-up survey to determine whether Kaiser has corrected its alleged deficiencies and is complying with the law, said Shelley Rouillard, the agency’s director.

“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 in a statement.

Kaiser officials would not respond to questions by phone. In a statement, Kaiser said it will undertake a number of measures to improve mental health services. These include providing “more convenience in appointment times, office hours, and locations for mental health care services” as well as improving customer service before and after appointments; engaging better with patients to create well-defined treatment plans; help patients better manage their care and choose their own therapist; and add more individual therapy as part of “multi-modal treatment plan” that best suits the needs of the patient.

The National Union of Healthcare Workers, which represents 2,500 Kaiser mental health workers at 100 sites across the state, called Kaiser’s decision to pay the fine an admission of guilt. The head of the union, which is in stalled contract negotiations with Kaiser, accused the HMO of continuing to provide insufficient mental health services, in violation of the law.

“Kaiser finally acknowledged its violations after a year and a half of fighting a cease and desist order” from state regulators, said Sal Rosselli, president of the union. “But it has yet to take any meaningful steps to correct the underlying problems in its mental health care system.”

While it agreed to pay the fine, Kaiser did not admit any wrongdoing. Brown, the Kaiser spokesman, said the Department of Managed Health Care should better define its standards. “We also call upon the DMHC to engage in an open and fair process of defining standards for timely access to mental health care services and apply these standards equally to all health care service plans in California,” he said.

In a routine survey conducted in 2012, the Department of Managed Health Care found Kaiser was distributing educational materials that described limitations in mental health benefits. Regulators said the information may have discouraged members from seeking services Kaiser must cover under the state’s Mental Health Parity Law, which requires health plans to provide the same level of benefits for mental illness as they do for physical illness.

Similar issues were highlighted in a 2011 report by the National Union of Healthcare Workers called “Care Delayed, Care Denied.” The union report claims, among other things, the HMO severely understaffed its mental health services and failed to provide timely access to individual therapy as required by state law.

News of Kaiser’s decision to drop the appeal and pay the full fine comes as local officials begin to closely examine patients’ complaints about Kaiser’s mental health services.

Sonoma County Supervisor Shirlee Zane, who has publicly accused Kaiser of rationing mental health services by providing insufficient one-on-one psychotherapy, has scheduled a public forum for local residents to report their individual experiences with mental health care. The session will consider whether health plans are abiding by state and federal mental health parity laws, which require that coverage for mental health and substance abuse services be on par with those for medical services.

The forum is scheduled for Sept. 24, from 6 to 8 p.m. at the county Board of Supervisors chambers.

You can reach Staff Writer Martin ?Espinoza at 521-5213 or martin.espinoza@?pressdemocrat.com. On Twitter @renofish.