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Californian Health Insurance Firm Fined Three Million Dollars for Poor Oversight of Hospitals

by Gopalan on July 27, 2007 at 12:19 PM Health Insurance News

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.

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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.

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Californian Health Insurance Firm Fined Three Million Dollars for Poor Oversight of Hospitals

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