Citing Need for Patient Protection, Zingale Rejects Dismissal of Fine Against Kaiser Permanente
Department of Managed Health Care Director Daniel Zingale has rejected a ruling by a state administrative court judge that struck down a "landmark" $1.1 million fine against Kaiser Permanente over "alleged lapses in patient care," the Los Angeles Times reports. In his ruling, made public yesterday, Judge Michael Cohn agreed with Kaiser's argument that the department "overstepped its authority" when it issued the fine, citing a 1975 law that "allows HMO regulators to oversee health plan finances but not the quality of medical care that patients receive." Cohn instead said that Kaiser should be fined $25,000 for not following the grievance process established by the state. But contending that the ruling would "gut the state's patient protection laws," Zingale yesterday exercised his power under state law to reject the decision. Zingale's rejection means that Kaiser can now make one final appeal to the DMHC before filing suit in Superior Court, where a decision in the company's favor could not be overturned by Zingale (Ornstein, Los Angeles Times, 5/31).
The dispute stems from the 1996 death of Margaret Utterback, who died from a stomach aneurysm in Kaiser's Hayward hospital after making numerous efforts to see her physician about back and abdominal pain the day of her death (Colliver, San Francisco Chronicle, 5/31). The DMHC issued a $1 million fine in 2000 and then increased the fine by $100,000 because of two similar deaths in other Kaiser facilities (California Healthline, 12/11/01). While health plans and the DMHC generally agree that the agency can regulate HMOs for "failures under their control, such as delays in scheduling appointments or authorizing procedures," the issue "gets murkier in cases where hospitals or doctors delay or deny care" because regulating providers falls under the jurisdiction of other agencies, including the Department of Health Services, the Sacramento Bee reports. This regulatory gray area is more pronounced with Kaiser because it operates both a health plan and a medical group, experts say (Rapaport, Sacramento Bee, 5/31). Kaiser officials said that Cohn's ruling "validat[ed]" the care that Utterback received (San Francisco Chronicle, 5/31). But Foundation for Taxpayer and Consumer Rights Executive Director Jamie Court said the judge's decision could "weaken the [DMHC's] ability to regulate HMOs" (Sacramento Bee, 5/31). Cohn's ruling is the latest in a series of decisions finding that the department has overstepped its authority, including cases where judges ruled that it could not force HMOs to cover specific prescription drugs or mandate the release of information on doctors' group finances (Los Angeles Times, 5/31).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.