California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Kaiser To Pay $4M Fine Over Violations of Calif. Mental Health Laws

On Tuesday, Kaiser Permanente announced that it has dropped its appeal of a $4 million fine issued by the California Department of Managed Health Care last year for failing to correct violations of mental health laws, the Sacramento Bee's "Healthy Choices" reports.

The penalty was the second-largest fine in DMHC's history (Craft, "Healthy Choices," Sacramento Bee, 9/9).


The fine was issued after DMHC in March 2013 issued a report finding that Kaiser mismanaged its mental health care services. The report was released as part of a routine mental and physical health services survey conducted every three years.

The report found that Kaiser had:

  • Made patients wait excessively long periods between appointments; and
  • Offered patients inaccurate information that could have dissuaded them from seeking long-term individual therapy.

According to the report, Kaiser provided information sheets stating that individual counseling services "will not be a Kaiser-covered benefit and will not be paid for by Kaiser." DMHC said that such statements "are in error because the [p]lan is required to provide coverage for serious mental illnesses under the same terms and conditions as medical conditions."

DMHC said the fine stemmed from Kaiser's failure to:

  • Reduce wait times;
  • Fix inaccurate information; and                                     
  • Properly record tracking data for mental health appointments (California Healthline, 6/26/13).

Details of Kaiser Announcement

According to the Bee, Kaiser's announcement came after a judge denied the insurer's request to keep documents from the trial private. A hearing in the case was scheduled for this week ("Healthy Choices," Sacramento Bee, 9/9).

DMHC Director Shelley Rouillard said that in addition to collecting the fine, the agency now will conduct a follow-up survey to ensure that Kaiser has fixed the deficiencies "and is complying with the law."

Kaiser also said Tuesday that it is taking steps to increase access to mental health care by:

  • Allowing patients to give input on treatment plans (O'Neill, "KPCC News," KPCC, 9/9);
  • Improving customer service;
  • Letting patients choose a therapist; and
  • Strengthening patient privacy.


Sal Rosselli, president of the National Union of Healthcare Workers, in a statement said, "By paying the fine, Kaiser finally acknowledged its violations, but has yet to take meaningful steps to correct the underlying problems in its mental health care system" (Rauber, "Bay Area BizTalk," San Francisco Business Times, 9/9).

Clement Papazian, a social worker who works at Kaiser's Oakland Medical Center, said the decision is "an admission by Kaiser that it has knowingly violated California mental health laws and shortchanged its patients" and "a vindication of what Kaiser mental health clinicians have been saying for years."

However, Kaiser said it still disagrees with the penalty and denies any wrongdoing (Dembosky, "State of Health," KQED, 9/9).

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