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California’s largest health system agreed to a $200 million settlement on October 12 following an investigation that found the system has failed to provide timely behavioral health appointments for patients and has canceled more than 100,000 appointments.
Kaiser Permanente, which also runs a health plan, will “undertake a systemic overhaul” of its behavioral health services, Mary Watanabe, director of the Department of Managed Health Care (DMHC), the regulatory body that oversees managed care plans in California, said in a statement.
The DMHC began investigating Kaiser in May 2022 after the Oakland-based health system saw a 20% increase in behavioral health patient complaints in 2021, the DMHC said in a statement.
Under the settlement, Kaiser must pay the department a $50 million fine and will invest $150 million over five years to improve the health system’s behavioral health services, the DMHC announced. The fine is the largest the DMHC has ever imposed, according to Watanabe.
“Today’s actions represent a tectonic shift in terms of our accountability on the delivery of behavioral health services,” California Governor Gavin Newsom said in a statement. “Accountability of the private sector is foundational to ensuring our entire system of behavioral health care works for all Californians.”
The DMHC has ordered Kaiser to:
- Hire an outside consultant to make sure the system is providing timely access to essential behavioral health care.
- Improve its quality assurance program.
- Improve beneficiary access to the system’s network of behavioral health providers, including contracted and out-of-network providers.
- Improve its grievances and appeals processes.
- Develop processes to make sure the system complies with all behavioral health parity laws.
In two separate investigations, the DMHC found that it had taken Kaiser patients 19 days on average to get a follow-up therapy appointment in 2021. California state law requires health plans to provide follow-up appointments within 10 days.
When a health plan is unable to offer a timely follow-up appointment due to a lack of providers, it’s legally required to help patients find an appointment with another “appropriate provider.” Kaiser has failed to consistently do so, the DMHC found.
The health system had also canceled at least 111,803 behavioral health appointments in 2022 during a 10-week Kaiser worker strike, the DMHC found. The health system is still required to provide timely access to appointments during a strike, the DMHC said.
Kaiser Chair and CEO Greg Adams said in a statement that the health system has struggled to meet increased demand for behavioral health services during the pandemic.
“California and the nation have seen an unprecedented rise in demand for mental health care services over the past three years, largely driven by the global pandemic and its aftermath,” Adams said. “Kaiser Permanente saw a 33% increase in need during the pandemic and have seen 20% more people come in for care in 2023 than at this point last year.”
Kaiser has invested an additional $1.1 billion into its mental health services since 2020, and has also hired close to 600 additional therapists, Adams said.
“Even so, during the period of the DMHC survey, we fell short of our members’ expectations and our own expectations,” Adams said.
In the future, Kaiser plans to create programs to address the “dramatically rising mental health needs of youth and teens,” as well as provide digital wellness offerings, partnerships with schools, workforce development programs to improve the mental health provider pipeline, and initiatives to integrate mental health care into primary care, Adams said.
Sal Rosselli, president of the National Union of Healthcare Workers, which led the 10-week strike in 2022, said in a statement shared with Healthcare Brew that Kaiser’s settlement is a “monumental victory for Kaiser Permanente patients and its mental health therapists who have waged multiple strikes over the past decade to make Kaiser fix its broken behavioral health care system.”
Rosselli added that “the success of any overhaul depends on Kaiser agreeing to work in tandem with therapists to build a better model for delivering care.”