California Fines Kaiser $1 Million In “Midnight Action”

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5 PM Friday Fine Keeps HMO Abuses In Dark

Governor Davis’ Department of Corporations issued a $1 million penalty and a cease and desist order against Kaiser Foundation Health Plan on Friday night at 5 PM.

The fine, perhaps the most significant in state history against an HMO in a patient’s case, arose from the death of Margaret Utterback, a 74-year old patient in 1996. She had a ruptured abdominal aortic aneurysm and was consistently refused access to care by Kaiser on repeated occasions.

“I am pleased that the state is making a statement that they will not tolerate this type of behavior anymore and that Kaiser will not be allowed to engage in much of the conduct that led to my mother’s death,” said Terry Preston, Mrs. Utterback’s daughter. “Kaiser‘s lack of remorse suggested these deserve larger fines in more cases.”

“It is a significant step forward that this Administration is willing to fine HMOs for conduct in an individual patient’s case , but it’s troubling that the Davis administration appears unwilling to use its bully pulpit to publicize egregious HMO conduct in the light of day,” said Jamie Court, advocacy for Foundation for Taxpayer and Consumer Rights (FTCR), who claims that the announcement was timed to avoid media scrutiny. “This is an important signal that the state will stand up for patients, but they must do it in day light for their actions to have full resonance and to force HMOs to treat patients better. Kaiser‘s defiance to this fine and lack of regret in this case is a symptom of an industry that has been without sunshine on its practices for too long. The state must not be complicit with the industry in keeping information from the public and maintaining the curtain of secrecy that surrounds HMO abuses. California patients need evidence of abuses at HMOs to be aired in the light of day not concealed in midnight actions.”

The only other fine of this size in a patient’s case that has been made public is the $500,000 issued by the Wilson Administration against Take Care-FHP in the case of Wilms tumor cancer patient Carley Christie. FTCR is currently pursuing a class action unfair business practices against Kaiser that alleges the HMO failed to live up to the promises in its advertising and marketing materials that money was separate from medicine at the HMO.


Consumer Watchdog
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