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Kaiser Permanente Fined $5M For Poor Management Of Kidney Transplant Program

Kaiser Permanente will pay a $2 million fine to the California Department of Managed Health Care and donate $3 million to Donate Life California, an organ donation advocacy program, after state regulators determined that the HMO failed to properly monitor its two-year-old Northern California kidney transplant program, the San Francisco Chronicle reports. Kaiser, which formerly contracted with University of California-San Francisco and University of California-Davis to perform transplant surgeries, established its own kidney transplant center for members in Northern California in 2004 (Colliver, San Francisco Chronicle, 8/11). DMHC began investigating the program earlier this year after the Los Angeles Times reported that Kaiser's poor management of the transfer of up to 1,500 patients from UC hospitals to its own center resulted in delays for some patient procedures (Lawrence, AP/Houston Chronicle, 8/10). The Times reported that twice as many Kaiser patients died on the waiting list as received kidneys in 2005 because of delays in transferring medical records to the new program and other management issues (Ornstein/Weber, Los Angeles Times, 8/10). Cindy Ehnes, director of DMHC, said Kaiser failed to provide adequate administrative oversight of the transplant program and provided too few personnel to handle the transfers. In addition, Kaiser did not provide patients with timely access to specialists and did not respond properly to patient complaints, Ehnes said. Kevin Donohue, deputy director of DMHC, said his department has no "strict indications" that any patients died as a direct result of the problems (AP/Houston Chronicle, 8/10). Amid the state investigation and increased federal pressure on transplant programs, Kaiser on May 12 announced it would close the Northern California transplant center and transfer patients back to UCSF and UC-Davis. About 22% of Kaiser's 2,300 kidney patients have been transferred so far, according to DMHC. The Kaiser program can perform transplants if organs become available during the transfer process (San Francisco Chronicle, 8/11).

Broader Investigation

DMHC officials said they have launched a broader investigation of the HMO to determine whether Kaiser routinely ignores or mishandles patient complaints. Ehnes said the investigation seeks to determine whether there is "anything else that they may have been missing because of the way that they are monitoring their grievances." She added that Kaiser officials "had not somehow heard the concerns of patients, of treating physicians and of others that there were things awry" in the program. The investigation will examine how Kaiser addresses complaints by staff and patients, as well as its procedure for evaluating doctors, Ehnes said. DMHC could consider additional fines against Kaiser when the investigation concludes, she added (Ornstein/Weber, Los Angeles Times, 8/11).


Mary Ann Thode, president of Kaiser Foundation Health Plan's Northern California region, said, "We deeply regret any problems, difficulties or concerns that any of our members may have had or experienced as a result of the kidney transplant program," adding, "This experience has really caused our organization to reflect on how we can continue to improve moving forward. We have learned [from] our experience, and we will demonstrate that through our actions." Thode said Kaiser's expenditures for the fine and donation will not be passed on to members through premiums or fee increases. Ehnes said, "Being big didn't work to [Kaiser's] advantage. Being big created barriers to what needed to be done" (Griffith, Sacramento Bee, 8/11). Jamie Court, president of the Foundation for Taxpayer and Consumer Rights said the size of the fine "doesn't send a message to Kaiser," which reported $8.5 billion in second-quarter revenue (San Francisco Chronicle, 8/11). Please note: The Kaiser Family Foundation is not associated with Kaiser Permanente or Kaiser Industries.

"Reprinted with permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.