Kaiser Contests State Authority To Regulate It

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Claims Not To Dispute Facts In Patients’ Death, Just Any Obligation Under State Law

In yesterday’s administrative hearing in Oakland regarding a $1.1 million fine issued by the State, lawyers for Kaiser, the state’s largest HMO, told the judge that the issue in the case was the fining authority and jurisdiction of the California Department of Managed Care (DMC). Steve G. Madison, the Kaiser attorney, claimed that Kaiser did not dispute the facts relating to deaths springing from inadequate access to Kaiser emergency rooms, but simply that Kaiser had an obligation to prevent them and that the state could fine Kaiser over them.

According the Madison, the DMC is a new agency that is trying to make a name for itself as a consumer advocacy organization, but that “lawmakers cannot be lawbreakers” and “in its [the DMC’s] zeal to be perceived as a patient and consumer advocate the department is overstepping its” regulatory boundaries.

Kaiser is challenging the very notion that it has any obligation under the law to provide access to its emergency rooms and not to kill patients under its roof that could have survived with timely access,” said Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights in Santa Monica. The consumer group is monitoring the hearing. “This case is becoming a battle over whether Kaiser has a license that requires it to provide timely care to patients or whether it has a license to kill.”

Kaiser has asked a federal court judge in Los Angeles to hold DMC Director Daniel Zingale in contempt for bringing up evidence about the death of Medicare patients in conjunction with the Oakland hearing. On December 10, Zingale will appear in federal court to show cause why he should not be held in contempt.

“The arrogance and indifference of Kaiser is matched only by its audacity in claiming in this case that the Department has no jurisdiction, when in a class action our group filed against Kaiser for false advertising the HMO claimed the case should be dismissed because it was fully accountable to the Department ,” said Court. “Kaiser is talking out of both sides of its mouth. This HMO is seeking to put itself above the law in every jurisdiction where the public challenges it.”

In papers filed in San Francisco Superior Court in 1999, in the Foundation’s false advertising case (Victa et al v. Kaiser), Kaiser claimed, “Plaintiffs seek to restructure the way in which Health Plan conducts its business and to enjoin defendants’ alleged false advertising. These activities are highly regulated by the California Department of Corporations [predecessor to DMC] under a comprehensive and complex set of statues and regulations’. the recent creation of the Department of Managed Care to carry on the DOC’s work in an even more defined framework only serves to underscore the Legislature’s intent to place the regulations on managed care in the hands of a highly specialized agency, not in the courts. Nonetheless Kaiser went to federal court against Zingale to prevent him from putting on evidence in the case and has claimed DMC cannot punish it for inadequate access leading to patient deaths.

Developments in yesterday’s hearing in Oakland:

‘ In his opening statement, Steven G. Madison — attorney for Kaiser Foundation Health Plan (KFHP) — stated that many experts would be brought by the Department of Managed Care (DMC) through the course of the hearing that would speak to “medical group standard of care issues” and not to the Knox-Keene Act, which is the only germane issue at hand. He repeatedly asserted that this is not a case of medical malpractice but rather one of regulation. The question, according the Madison, is how the Knox-Keene Act — which gives the DMC its regulatory authority over all state Health Plans — was intended to be used. Madison stated that the very legislator who wrote the Act — who would be called to testify later in the hearing — has stated that the actions of the state regulator in issuing the fine to Kaiser has “turned the Act on its head.” Madison’s aim in the hearing was clearly to reinforce the notion that KFHP — the party fined by the DMC — was an entirely separate entity from the Kaiser Physician Medical Group, and to demonstrate that the DMC does not in fact have the authority to apply the Act in the manner they had.

‘ Madison assured the judge that for the most part the facts in the case would not be disputed, but rather the dispute would be over the proper jurisdiction of the DMC and the proper application of the Act. Yet, he proceeded throughout the day to directly contradict the facts presented by the DMC and by its witnesses: Barbara Winnie and Terry Preston, both daughters of Margaret Utterback, whose death led to the record $1.1 million.

Among the facts in dispute

1. Madison stated that on the day in question “she [Mrs. Utterback] thought that she had a mild case of food poisoning [from sea food eaten the previous night] and wanted to see her physician only” and that she refused to be seen by a different physician or to go to the emergency room. Winnie — who had been with her mother through out the majority of the day — testified that her mother had never mentioned anything about possible food poisoning and though her mother did request repeatedly to see “her physician” — Dr. Rod Perry — nonetheless no suggestion had been made by Kaiser telephone representatives that she be seen by a different physician or that she should go the emergency room. When questioned directly, Ms. Preston later testified that she too had never heard any one mention anything about possible food poisoning.

2. Regarding the timeline of events, Ms. Winnie testified that an appointment was finally made at 2:00 pm for approximately 4:20 pm that afternoon. In his cross-examination Madison asked if she was aware that the Kaiser computer had recorded the time that the appointment had been made as in fact 2:35 pm. Ms. Winnie said, “that is not correct”. Again there was a disagreement about the time that Ms. Winnie finally checked in at Point Eden Clinic, with Ms. Winnie estimate being much earlier than the alleged records of the Kaiser computer. Ms. Winnie said, “that is not correct either.”

3. In his effort to describe a perfectly running system, Madison said in his opening statement that following Mrs. Utterback’s conversation with a Kaiser telephone representative, the representative had sent an e-mail to Dr. Perry and that Mrs. Utterback had been called later in the day to be given an appointment. Ms. Winnie testified that no one from Kaiser had ever called back and that an appointment had only been secured after over six separate calls to Kaiser, in which Mrs. Utterback was transferred repeatedly to both other representatives and to voice mail. Both Preston and Winnie testified that in their meeting with Dr. Perry following their mother’s funeral, Perry said that indeed he had received the e-mail but the he “did not have time to respond.”

4. Madison questioned both Preston and Winnie regarding their mother’s attitude toward Emergency Rooms asking: Didn’t your mother hate emergency rooms, because they are filled with sick people? To Preston he asked: Didn’t you speak with your sister later about her regrets at having not taken your mother to the emergency room? The sisters each independently agreed that their mother did not enjoy emergency rooms, but Preston answered that neither her mother’s distaste for emergency rooms nor her sister’s regret had ever been discussed in much length.

5. Regarding the sisters’ numerous visits to various Kaiser representatives in their effort to obtain answers as to what had gone wrong, and specifically in their visit to Dr. Jewitt, Madison said to Preston: you were very upset in your visit weren’t you? Preston answered: “if you mean was I emotional,” no I just wanted answers. Madison said, but isn’t it true that you yelled. Preston answered: no, “I’m not a yeller”. Madison continued: then one of your sisters yelled. Preston answered: no, “we’re not yellers”.

6. In his effort to differentiate KFHP from the medical group, Madison asked regarding the numerous visits: were you aware that none of the people you spoke with were from KFHP? Preston answered: no.

7. In his continued effort to remove fault from Kaiser, Madison asked: were you aware that in your mother’s coverage agreement, it details how to handle complaints and grievances. Preston answer “no” she was never aware and that in fact not one of the Kaiser representatives she corresponded with following her mother’s death had ever mentioned any thing about the coverage agreement or about any proper procedure or forms for filing a complaint.

Consumer Watchdog
Consumer Watchdog
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