Federal Judge Rules in Favor of Zingale in Kaiser Permanente Contempt Case
A federal judge in Los Angeles yesterday denied Kaiser Permanente's request to have Department of Managed Health Care Director Daniel Zingale placed in contempt of court over a "record-setting" $1.1 million fine Zingale imposed against the state's largest HMO, the San Francisco Chronicle reports. Judge Ronald Lew ruled that Zingale did not exceed his authority as a state regulator when he increased Kaiser Permanente's fine based in part on the death of patient enrolled in the insurer's Medicare+Choice plan, Senior Advantage. The "convoluted legal battle" originated last year when the DMHC issued a $1 million fine based on the 1996 death of Margaret Utterback, a 74-year-old San Leandro woman who suffered a fatal aortic aneurysm while waiting to see a doctor at a Kaiser facility. In February, the department increased the fine by $100,000 because of two similar deaths in Kaiser Permanente facilities, one of which involved a Senior Advantage patient, Wolfgang Spunbarg. Kaiser appealed the fine, arguing that Zingale's consideration of Spunbarg's death in raising the fine violated an August ruling by Lew stating federal law "supersedes" state law with respect to Medicare beneficiaries. But Lew said yesterday that Zingale's actions "did not warrant contempt charges," the Chronicle reports (Colliver, San Francisco Chronicle, 12/11).
Lew's decision was a "victory for Zingale in a larger fight over the state's ability to fine HMOs," the Los Angeles Times reports. "We're not going to let the HMO lobby get in the way of our enforcement actions," Zingale said (Ornstein, Los Angeles Times, 12/11). Gov. Gray Davis (D) added, "It's a victory for patients" (Rapaport, Sacramento Bee, 12/11). Still, the legal battle is not over, as Kaiser Permanente has also appealed the fine in a state administrative court in Oakland. In this appeal, the insurer is arguing that the DMHC "lacks the authority to impose fines" on health plans "based on the behavior of its doctors and hospitals, which are regulated by other state agencies." Kaiser Permanente lawyers said that they might return to Lew with further evidence regarding the contempt issue (Los Angeles Times, 12/11). While some consumer advocates have said that the HMO is trying to "strong-arm" Zingale, Kaiser officials said they were simply attempting to clarify how far the department's regulatory reach extends (San Francisco Chronicle, 12/11). Steven Madison, an attorney representing Kaiser Permanente, said, "I'm sorry if [Zingale] really feels that way. We have enormous respect for the director and the department" (Los Angeles Times, 12/11).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.