KAISER PERMANENTE: UNDER FIRE FROM CALIFORNIA REGULATORS
Officials with the California Department of CorporationsThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
have found "widespread shortcomings in the quality of services"
provided by Kaiser Permanente, California's largest HMO,
according to a new review report. SAN FRANCISCO CHRONICLE
reports that state regulators have "threatened disciplinary
action" if Kaiser doesn't fix the problems cited in the report.
The CHRONICLE notes that the department "is not claiming that
Kaiser is any worse than other HMOs" but is "simply the first HMO
to be reviewed" under a tougher process "designed to sharpen the
teeth of the watchdog agency." The CHRONICLE obtained the report
and other documents including a warning letter dated August 14
that "lists more than a dozen" Kaiser shortcomings that remain
after a review and the company's written response last fall. A
follow-up survey is scheduled six months from now.
UNSATISFACTORY: The survey of Kaiser's Northern California
region facilities questioned whether the HMO "improperly" denied
claims for emergency room care received outside Kaiser's network.
Other deficiencies cited "include failure to make sure patients
see the same doctor for a single illness, lack of follow-up care
after emergency room visits and unreasonable denial of ambulance
service." The report also questioned "whether Kaiser's
telephone-advice nurses give advice free of cost-cutting
pressures." It found that Kaiser did not "adequately" address
"systemic quality of care issues." However, the report did
praise Kaiser "for its lack of 'formal barriers to necessary
care,' and said the system handles most common consumer
complaints rapidly and fairly" (Hall, 8/28).
RESPONSE: Kaiser officials said it had addressed and begun
fixing most of the problems outlined in the review. Tom Debley,
spokesperson for Kaiser, said, "This is a new process, and we're
first in line. I think we're all going to be learning from it
and it'll be healthy for all of us. We don't look at this as
anything to fear" (Brazil, SAN FRANCISCO EXAMINER, 8/29).
Kaiser's Associate Executive Director for Quality and Health
Policy Dr. Jay Crosser said that many of the problems involve
"paperwork and financial issues as opposed to medical failures."
He acknowledged previous problems with reimbursement for
emergency room treatments but said that Kaiser "recently entered
into an agreement with a nationwide group of emergency room
physicians that sets new standards for what should and shouldn't
be considered an emergency" (see AHL 8/19). He believes that the
new standards will "put to rest most emergency-care squabbles."
DOCTORS VS. NURSES?: However, Anita Ostroff, senior counsel
for the Department of Corporations, said that she "doubts" the
new agreement will make a difference, because Kaiser maintains a
policy that allows claims-review nurses to refuse to pay for non-
network emergency treatments already approved by Kaiser
physicians. "There should not be a nurse directly overruling a
physician ... based on a retrospective review," Ostroff said
KAISER KANSAS CITY: Kaiser Permanente announced that it
"has begun exclusive negotiations to buy Preferred Health
Professionals," one of Kansas City's largest preferred provider
organizations (PPOs). Kaiser Foundation Health Plan of Kansas
City Inc. President Kathryn Paul said that the purchase would be
the "first" PPO acquisition by a Kaiser plan. While the
financial details were not released, KANSAS CITY STAR reports
that the companies hope the deal is "complete by early 1997."
Paul said, "The significance is, we will ultimately have the
ability to offer broader choice, more products, and bring a
product to market we believe the market is wanting" (Karash,