California Fines Kaiser $4M Over Violations of Mental Health Laws

Wednesday, June 26, 2013


On Tuesday, the California Department of Managed Health Care fined the Kaiser Foundation Health Plan $4 million for failing to correct violations of mental health laws, Modern Healthcare reports.

The health plan is part of Kaiser Permanente’s integrated health care delivery system (Carlson, Modern Healthcare, 6/25).

The fine is the second-largest in DMHC’s history (Craft, Sacramento Bee, 6/26).


In March, DMHC issued a report finding that Kaiser mismanaged its mental health care services.

The report was released as part of a routine mental and physical health services survey conducted every three years.

The report found that Kaiser had:

  • Made patients wait excessively long periods between appointments; and
  • Offered patients inaccurate information that could have dissuaded them from seeking long-term individual therapy.

According to the report, Kaiser provided information sheets stating that individual counseling services “will not be a Kaiser-covered benefit and will not be paid for by Kaiser.” DMHC said that such statements “are in error because the [p]lan is required to provide coverage for serious mental illnesses under the same terms and conditions as medical conditions” (California Healthline, 3/20).

Details of DMHC Announcement

On Tuesday, DMHC said that the fine stems from Kaiser’s failure to:

  • Reduce wait times;
  • Fix inaccurate information; and
  • Properly record tracking data for mental health appointments.

The agency has scheduled a follow-up inspection for October (Modern Healthcare, 6/25).

Kaiser’s Response

Following DMHC’s announcement, Kaiser officials said they plan to challenge the penalty for being too high.

John Nelson, a vice president at Kaiser, said the fine is “unwarranted and excessive.”

Nelson also said that the majority of first-time therapist appointments are booked within 10 business days and that Kaiser has hired additional staff to reduce wait times (Sacramento Bee, 6/26).

He said that each problem identified by DMHC has “already been corrected, or is very far along toward resolution” (Robertson, Sacramento Business Journal, 6/25).

Broadcast Coverage

Headlines and links to broadcast coverage of the Kaiser fine are provided below.

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