When it was announced last fall, Kaiser Permanente’s unprecedented $200 million settlement with the State of California was seen as a significant step toward shoring up Kaiser’s consistently abysmal performance in providing mental and behavioral health care to its patients.
Ten months later, almost nothing has changed. Not only that, but Kaiser and the state haven’t yet come to terms on an action plan, the foundation from which new policies and procedures would be set in motion.
And due to the wording of the settlement agreement itself, a part of this process, which involves Kaiser contracting an outside consultant to help formulate and implement the plan, expires in October of 2025. It can be extended only at Kaiser’s discretion.
“It’s a substantial issue,” said Fred Seavey, research director for the National Union of Healthcare Workers, which counts thousands of its members among Kaiser’s mental health professionals statewide. (The NUHW is a financial supporter of Capital & Main.)
“If I’m driving down the highway and I’ve got a broken taillight, I get a fix-it ticket and I have 30 days to fix the problem,” Seavey said. “But our state’s largest health care provider, 9 million enrollees, is violating multiple laws and they don’t even have a corrective action plan in place after 10 months.”
Neither party involved disputes the fact that no plan to fix the problems has been finalized. Both Kaiser and the state’s Department of Managed Health Care (DMHC) say, essentially, that the process is ongoing.
“We submitted a Corrective Action Work Plan for the DMHC’s review on Feb. 1, 2024,” said Kaiser spokesperson Kathleen Campini Chambers. “Per the settlement agreement, both organizations have been engaged in dialogue to finalize [it].”
Rachel Arrezola, a spokesperson for the Department of Managed Health Care, confirmed that the DMHC received a draft plan from Kaiser in February. The state, Arrezola said, responded with its own input within a month, “and has engaged with [Kaiser] since then to ensure that Kaiser’s final Corrective Action Work Plan addresses the corrective action areas in the settlement agreement.”
The settlement required Kaiser to hire a third-party consultant to help it put together a program to address severe shortcomings in its delivery of mental health services, a problem for which the giant company has been cited repeatedly by the Department of Managed Health Care for more than a decade.
The stakes are high. The agreement from last fall lists seven areas of mental health care provision in which Kaiser is deficient. Those include long delays for patients trying to schedule mental health appointments, a failure to contract enough high-level behavioral care facilities within its network, and Kaiser’s failure to make out-of-network referrals consistent with requirements under the law when in-network providers are not available.
Demand for Kaiser’s mental health care services rose 33% during the COVID-19 pandemic, and 20% more people sought care in 2023 than the year before, said Kaiser CEO Greg Adams. Between 2016 and 2020, meanwhile, anxiety or depression diagnoses for children ages 3 to 17 in California rose by 70%, according to the Annie E. Casey Foundation. The need for vastly improved mental health care services isn’t going away.
There is no timetable for Kaiser’s action plan to be finalized and put in place. The only real window on the calendar is the requirement for Kaiser to use the outside consultants (they haven’t been publicly identified) and meet with the state on a quarterly basis once a plan is set. That requirement expires in October of 2025, and the state doesn’t have the authority to extend it. Per the agreement, it’s Kaiser’s call.
Chambers, the Kaiser spokesperson, said the health giant isn’t waiting for the plan to be finalized “to begin addressing shortcomings,” adding that changes have been underway since last fall. For the most part, Kaiser mental health professionals say they aren’t seeing that.
The National Union of Healthcare Workers, which is negotiating with Kaiser on behalf of its 2,200 mental health professionals in Southern California, said that Kaiser is still failing to provide generally accepted standards of mental health care, including timely appointments and follow-ups.
Some staffing and workflow issues are beginning to improve in Northern California, but only after NUHW mental health professionals initiated a grinding strike in 2022. Kaiser’s agreement with the state, meanwhile, calls for it to undertake “a systemic overhaul” of its mental health care system — the kind of major change that no single job action is going to produce.
The state fined Kaiser $50 million as part of last fall’s settlement, the largest fine it has ever levied against a health care provider, and ordered it to add another $150 million over the next five years to its effort to build out mental health services. Those aren’t huge sums in the scope of Kaiser’s $100 billion in operating revenue last year, but they were meant to get the health giant’s attention.
Creeping up on one year since that agreement was announced, it’s still unclear whether the state succeeded. “The settlement agreement is moving forward,” the Department of Managed Health Care said. As of yet, there’s no document to prove it.
