The Californian state authorities are cracking down on Kaiser Permanente, a giant health maintenance organization (HMO) for poor oversight of the hospitals under its umbrella, leaving the patients care in jeopardy.
The 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.
The conglomerate is being cited for its haphazard investigations of questionable care, physician performance and patient complaints at its California hospitals.
A health maintenance organization (HMO provides health insurance that is fulfilled through hospitals, doctors, and other providers with which the HMO has a contract.
Care provided in an HMO generally follows a set of care guidelines provided through the HMO's network of providers.
Under this model, providers contract with an HMO to receive more patients and in return usually agree to provide services at a discount. This arrangement allows the HMO to charge a lower monthly premium, which is an advantage over indemnity insurance,
The traditional indemnity plan reimburses medical expenses, regardless of who provides the service. Different plans use different methods for determining how much one will be reimbursed.
The case against Kaiser is that hospitals it networked followed different standards - some rigorously pursued potential medical mishaps; others did not.
The Californian investigation centred 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.
Marcy Gallagher, the chief state surveyor on the Kaiser inquiry, 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."
Managed Health Care director Cindy Ehnes said, she will forgive $1 million of the record penalty if Kaiser made necessary improvements in its monitoring system.
This is 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.
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.