[kaiserthrive.org's editor's note: Is this vindication for Kaiser critics, who have been making these claims for years, only to be erroneously discredited, abused and marginalized by Kaiser management and its less than ethical PR and legal departments? Feels a little like vindication, but in our experience these people seem to regret their horrendous actions quite a bit less than they do being caught.

We received an email from a Kaiser employee a few days ago, asking us if we would be willing to post some tangible steps that Kaiser could take to improve itself, as well as a score card listing some of these steps and how Kaiser is doing with implementing them. Kaiser makes a point of pretending it doesn't respond to anything we do, which we know for a fact isn't true, but in the spirit of supporting what is best for Kaiser members we are more than willing to report on positive steps in the right direction. We're still hoping to find even one Kaiser member or employee who has been treated fairly in a dispute, and as soon as that happens it will be our pleasure to report it here.]

From the L.A. Times:

State fines Kaiser again

The HMO’s second such penalty in a year targets its handling of patient complaints at nine hospitals.

By Tracy Weber and Charles Ornstein, Times Staff Writers

Kaiser Permanente will be assessed a record fine today for its haphazard investigations of questionable care, physician performance and patient complaints at its California hospitals, according to state HMO regulators.

The California Department of Managed Health Care said it will levy a $3-million fine against Kaiser, the largest HMO in the state, with 29 medical centers and more than 6 million members. If Kaiser makes necessary improvements, agency director Cindy Ehnes said, she will forgive $1 million of that.

The penalty marks the second time in a year that Kaiser has been publicly rebuked and fined for glaring breakdowns in oversight.

The state’s latest inquiry grew out of its investigation into problems that forced the closure last year of Kaiser’s kidney transplant program in San Francisco. Hundreds of patients were endangered when Kaiser forced them to transfer to its own fledgling program from established transplant centers at outside hospitals.

Last August, the state fined Kaiser $2 million for the transplant debacle, and the HMO agreed to pay an additional $3 million to promote organ donation.

Even then, Ehnes said, the question remained: “How could it happen?”

To answer that question, the state focused on whether Kaiser was properly handling — or even knew about — allegations of subpar care at its hospitals statewide. Inspectors examined 246 files involving complaints, quality-of-care concerns and other issues from four hospitals in Kaiser’s Northern California region, and four in its Southern California region.

The investigation did not examine whether individual patients had been harmed, only on how well Kaiser monitored the quality of patient care.

“A patient has to be sure that if they have a problem — the health plan has their ears open to hear those complaints and their arms available to tackle any of the problems that have arisen,” Ehnes said in an interview. “That’s what our concern was, that those ears in particular seemed to be sometimes deaf.”

A top Kaiser official on Wednesday called the state’s 51-page inspection report “thorough and actually very constructive.”

The managed-care agency found that under the HMO’s massive umbrella, individual hospitals had their own rules: Some rigorously pursued potential medical mishaps; others did not.

The vast majority of the report focused on a system called “peer review,” a standard quality-assurance mechanism at hospitals in which doctors’ committees examine patient cases to determine if the care was appropriate.

Inspectors found large differences among hospitals in how often questionable cases were being referred for peer review. In Northern California, one hospital might refer as much as 20 times as many cases as another.

Even when peer review was performed appropriately, it did not always result in sufficient efforts to improve care, the report says. In a quarter of the 57 cases examined by the state in which peer review committees found a quality problem, follow-up was incomplete.

In one case, a peer review panel examining pediatric care determined that a doctor provided an “unacceptable standard of care,” but it doesn’t appear anyone alerted the hospital’s top doctors to the findings so they could act.

Regulators also found several instances in which doctors were in charge of investigating cases in which the treatment they provided was called into question.

Investigators said they stopped short of determining whether those reviews were handled appropriately.

“You can’t really move on from the taint of looking at your own case,” said Marcy Gallagher, the chief state surveyor on the Kaiser inquiry and the head of health-plan surveys at the managed-care agency.

Gallagher said inspectors identified at least three occasions on which committees at Kaiser hospitals inexplicably stopped their review of troubling cases before they were complete. Kaiser was asked to finish those reviews, she said.

Overall, the report found that the HMO “lacked the ability to verify consistent handling of complaints throughout its medical centers or to determine whether serious or chronic problems were being addressed.”

The nine Kaiser hospitals examined as part of the report are in Woodland Hills, Fontana, Baldwin Park, West Los Angeles, south Sacramento, San Rafael, South San Francisco, Fresno and San Francisco. The state did not identify which hospitals had the weakest systems.

Bernard Tyson, Kaiser’s executive vice president of health plan and hospital operations, stressed that the review did not take issue with the quality of care delivered. “The survey identified the areas in which there were shortcomings, and we have corrected those shortcomings or are well on the way to correcting those shortcomings,” Tyson said.

He added that the HMO is focused on shoring up the systems for handling member complaints and quality assurance at its hospitals — and not on the fine or the public relations fallout of two rebukes in as many years.

Unlike other HMOs, Kaiser is both a health plan and a hospital system. It works exclusively with an affiliated group of physicians called the Permanente Medical Group. Kaiser, a nonprofit organization, had nationwide revenue of $34.4 billion last year and net income of $1.3 billion.

Ehnes said Kaiser officials had been cooperative during the review process, “from the level of the national board on down.”

Although the report did not look at patient harm per se, Gallagher said the findings are troubling.

“You are creating incredible risk when you don’t have an oversight or a checks-and-balances system,” she said. “I hate to think that we have to wait for somebody to get harmed before we say, ‘Wait. Let’s make sure the safeguards are in place.’ ”

The report said Kaiser officials and board members received “extensive reports” on patient satisfaction scores and other quality indicators — such as cancer screenings and childhood immunizations — but no reports on trends or problems found at individual hospitals during confidential reviews.

Kaiser closed its Northern California kidney transplant program in May 2006 after The Times exposed how hundreds of patients were stuck in limbo for months — with little hope of receiving new kidneys — because the HMO had failed to properly handle paperwork transferring them to its new program in 2004.

In Kaiser’s program, twice as many patients died on the waiting list in 2005 as received kidneys, The Times found. The statewide pattern was the reverse: Twice as many patients received kidneys as died.

All the while, the Kaiser patients had to undergo prolonged dialysis, which removes impurities from the blood but can lead to fatal complications and reduce prospects for a successful transplant.

In the report to be released today, the state reiterated its contention that Kaiser knew only general information about the start-up of its kidney program, even though such a massive rollout had never been tried before. The HMO did not measure the effectiveness or adequacy of the start-up or monitor the timely access to transplant services for hundreds of its patients moved to Kaiser’s new program, the report says.

Under the managed-care agency’s oversight, about 2,000 Kaiser kidney patients were transferred to other programs.

“We have now, in many ways, done the concluding chapter to this whole kidney issue,” Ehnes said.

Actions promised

Kaiser Permanente has agreed to overhaul its quality oversight system to ensure that member complaints and concerns about questionable care are consistently reviewed at its 29 California hospitals. The HMO has agreed to:

* Pay $3-million fine, which will be reduced to $2 million if it corrects its problems quickly.

* Create a reporting system so HMO leaders can monitor how care is delivered and quality-of-care complaints addressed.

* Draft uniform set of standards for peer review — the process by which doctors’ committees examine patient cases to determine if the care was appropriate.

* Form a member concerns committee in Southern California to examine member grievances and complaints, similar to what is underway in Northern California.

* Audit physician peer review programs to ensure they are accurately evaluating — and correcting — potential quality issues.

* Reconfigure computer systems to better track quality reviews.