SACRAMENTO, Calif. (CN) — California’s largest health care provider will pay $50 million in a settlement over mismanagement of its behavioral health care services, and commit to an extensive overhaul to better serve people seeking behavioral health support.
The state's Department of Managed Health Care ordered Kaiser Permanente — California’s largest health care provider with 9.4 million members — to pay the $50 million fine and revamp its behavioral health services system. It also must invest $150 million within five years toward improving behavioral health programs.
In the settlement Thursday, the state said it has repeatedly cited Kaiser for deficiencies in its oversight. Since 2006, the department has brought several enforcement actions against Kaiser for failing to ensure quality assurance compliance when providing medical and behavioral health care services.
The department said that its investigation starting in 2022 found a lack of clarity between Kaiser and its associated medical groups, creating a pattern of inconsistent oversight and failures to intervene to ensure compliance with the law. Kaiser often cancels behavioral health appointments and often does not provide enrollees with timely behavioral health appointments, and did not meet clinical standards required during a mental health clinicians strike in August 2022.
The state also discovered legal violations in Kaiser’s behavioral health care delivery system — including a shortage of contracted behavioral health care facilities in its network, inadequate oversight of medical groups in evaluating appropriate care, not making out-of-network referrals when in-network providers are not available and inadequately handling enrollee grievances.
The department’s director Mary Watanabe called the agreement “historic” in requiring Kaiser to transform its behavioral health care delivery system.
“In addition to paying the highest fine the DMHC has ever levied against a health plan, Kaiser Permanente has agreed to make significant improvements to the plan’s operations, processes and procedures and business model to better assist enrollees with accessing care," Watanabe said in a statement. "The DMHC is committed to using its full authority to hold Kaiser accountable and ensure enrollees have access to behavioral health care when they need it.”
Greg Adams, Kaiser’s chair and chief executive officer, blamed the Covid-19 pandemic for the strain on behavioral health care services in a statement Thursday. He said Kaiser saw a 33% increase in need during the entire pandemic, with 20% more people seeking care in 2023 than in 2022 during a shortage of qualified mental health professionals.
Adams said that since 2020, Kaiser has invested $1.1 billion to boost mental health care treatment, hired 600 therapists and spent $195 million on 329 mental health provider offices.
Under the settlement, Kaiser will create programs such as improving services for adolescents and launching workforce development programs. It will hire an outside consultant to ensure that enrollees get timely access to behavioral health care services and improve other deficiencies in service availability.
The company must also improve enrollees’ access to all providers, including out-of-network providers for behavioral health services when Kaiser’s network cannot offer timely care. It is also required to improve its grievance and appeals policies and procedures, and develop processes to ensure compliance with all behavioral health parity laws.
“While we have made many enhancements to our mental health care delivery system, there is still work to be done to ensure our interventions and therapies are aligned with our members’ expectations and to ensure we achieve the best patient outcomes,” Adams said.
Kaiser has faced scrutiny from California leaders over the state of its behavioral health services for years. The Department of Managed Health Care began a non-routine review of its behavioral health system in May after years of complaints from patients, providers and members.
Gov. Gavin Newsom in a statement Thursday highlighted the fact that state law entitles patients to mental health or substance use disorder treatment or support appointments within 10 business days, and if needed, a follow-up appointment within another 10 business days.
"Today’s actions represent a tectonic shift in terms of our accountability on the delivery of behavioral health services," Newsom said. "Accountability of the private sector is foundational to ensuring our entire system of behavioral health care works for all Californians.”
Sal Rosselli, president of the National Union of Healthcare Workers representing more than 4,000 behavioral health workers, called the settlement a “monumental victory” for patients and therapists who called multiple strikes within the last decade “to make Kaiser fix its broken behavioral healthcare system.”
“We are thrilled that Kaiser has now agreed 'to undertake a systemic overhaul' of its behavioral healthcare system, but caution that the success of any overhaul depends on Kaiser agreeing to work in tandem with therapists to build a better model for delivering care,” Rosselli said in a statement.
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