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FILE NO: 933-0055
Final Report of a Non-Routine Medical Survey
Kaiser Foundation Health Plan, Inc.
A Full-Service Health Plan
TABLE OF CONTENTS
APPENDICES:
Final
Report
of
a
Non-Routine
Medical
Survey
Page
1
Kaiser Foundation Health Plan, Inc.
A Full-Service Health Plan
July 16, 2007
FILE NO: 933-0055
Pursuant to Section 1341(a) of the Knox-Keene Act ("Knox-Keene" or the "Act"), the
Department of Managed Health Care (the "Department") is charged with enforcing the
provisions of the Act and the Rules issued under the authority of the Act
. The Knox Keene Act
was enacted to require health care service plans to provide enrollees with access to quality health
care services and to protect and promote the interests of the enrollees. The Department's
Division of Plan Surveys conducts medical surveys
to ensure health plans meet their Knox-
Keene obligations.
A
N
ON
-R
OUTINE
S
URVEY
:
O
VERSIGHT OF
K
AISER
'
S
Q
UALITY
M
ANAGEMENT
S
YSTEM
The Department began an investigation of the adequacy of Kaiser's (the "Health Plan") oversight
system for the San Francisco Kidney Transplant Program (the Transplant Program) in May 2006.
The San Francisco Medical Center's mishandling of the Transplant Program's administration,
inclusive of enrollee complaints and grievances, raised Department concerns regarding the level
of Health Plan oversight for Programs administered at the Medical Center level.
The close media attention given the Transplant Program led to a series of newspaper articles
linking Kaiser to other quality of care problems, suggesting the Health Plan's mishandling of
enrollee and physician reported concerns potentially extended beyond the Transplant Program.
The Transplant Program issues, coupled with the progeny of complaints reported in close
proximity to this incident, formed a basis of good cause justifying a non-routine survey of Kaiser
Foundation Health Plan's Quality Assurance Program as mandated by Section 1370 and
associated Rules. Specifically, the survey assessed the Health Plan's system of oversight of
programs designed to monitor and evaluate care provided to members and the effectiveness of
the Medical Center quality programs, inclusive of Peer Review.
The Director authorized review of peer review proceedings and records conducted and compiled
pursuant to Section 1370 of the Act. Where medical review has been authorized, the survey
team is required by law to ensure the confidentiality of the records and information reviewed
along with the peer review proceedings.
A
NALYSIS
The Health Plan's inability to establish a system of governance of Medical Center and regional
quality activities hinders its ability to ensure local Medical Center programs consistently identify
1
References made throughout this report to "Section ......" are to sections of the Knox-Keene Health Care Service
Plan Act of 1975, as amended (California Health and Safety Code Section 1340 et seq. ["the Act"]). References to
"Rule ......" are to the regulations promulgated pursuant to the Act (Title 28 of the California Code of Regulations).
2
Surveys can be a routine general examination (scheduled on a recurrent basis) or non-routine (specific
examinations) for issues or deficiencies identified pursuant to Rule 1300.82.1. An examination or survey is
additional or non-routine for good cause for the purposes of Section 1382(b) when the plan has violated, or the
Director has reason to believe that the plan has violated, any of the provisions of Section 1370. (Rule
1300.82.1(a)(2))
Final
Report
of
a
Non-Routine
Medical
Survey
Page
2
Kaiser Foundation Health Plan, Inc.
A Full-Service Health Plan
July 16, 2007
FILE NO: 933-0055
and resolve problems in the delivery of health care and services. The problems in oversight stem
from two health plan guiding principles: 1) To allow substantial variation among and between
the Medical Center Quality Management (QM) programs, in both regions and 2) To grant
discretion and deference to physicians to set local QM peer review policy. These principles,
however, create barriers to the Health Plan's ability to form a comprehensive oversight system of
Kaiser's 29 Medical Centers, and clinical departments and to ensure early Health Plan
notification of significant changes, administrative decisions and serious problems in quality of
care when they arise.
The Health Plan relies on Medical Center QM programs, inclusive of peer review, to identify and
solve problems in care and services delivered to Kaiser enrollees. The Medical Centers must be
held accountable to the Health Plan for maintaining the integrity of these critical quality review
programs. The Health Plan, in turn, is held accountable to its enrollees and must eliminate
program variation and oversee rather than defer to Kaiser Physicians' peer review decisions.
The Health Plan's system of governance over the Medical Centers and medical groups requires
the establishment of a single set of Health Plan review standards for use by all 29 Medical
Centers and multiple clinical departments. A set of standards and a change to a "checks and
balances" relationship between the Health Plan, Medical Center and physician groups are
necessary changes to ensure the integrity and quality of Kaiser's system of care.
S
URVEY
T
EAM
The Department used seven experienced surveyors/reviewers for this survey:
1.
Three physicians with extensive clinical, managed care administration and utilization and
quality management experience including previous participation in the Department's routine
and non-routine medical survey process;
2.
Two registered nurses with critical care nursing, managed care and regulatory survey
experience;
3.
One epidemiologist/quality management specialist; and,
4.
One research analyst and one health care management professional to provide quality
management and analytical expertise.
The Department evaluated the Health Plan's QM oversight processes by:
1.
Performing interviews with Health Plan regional staff in both Northern and Southern
California,
2.
Examining related Health Plan documents, and,
3.
Reviewing case files broadly selected from the Health Plan's Medical Centers and
offices.
The Department selected nine Medical Centers: four from Kaiser Permanente Southern
California (KPSC) and five from Kaiser Permanente Northern California (KPNC), as a
representative sample to assess the Health Plan's QM oversight program for its 29 Medical
Centers as well as the quality programs administered at the Medical Center level.
Final
Report
of
a
Non-Routine
Medical
Survey
Page
3
Kaiser Foundation Health Plan, Inc.
A Full-Service Health Plan
July 16, 2007
FILE NO: 933-0055
This non-routine survey also included specific case investigations. The cases came to the
Department's attention by way of member complaints, referrals from Health Plan physicians, the
Medical Board and related media news articles. The Survey Team traced these cases to evaluate
the handling of the issues through the respective Medical Center QM programs and also in
relation to the Health Plan's oversight of the Medical Center's QM review. (Refer to
Appendix C for a description of the Survey Methodology.)
S
URVEY
R
ESULTS
Summary of Deficiencies and Final Department Determination
Health Plan Oversight - Governance
The Survey Team concluded the Health Plan lacked an effective Quality Program oversight
system, evidenced by:
1.
A lack of monitoring and evaluation of the care provided by the system of providers and
facilities.
STATUS: The Plan has initiated remedial action and is on its way to achieving
acceptable levels of compliance.
2.
A failure to inform providers and facilities of the scope of the QM responsibilities or how
it will be monitored by the Health Plan.
STATUS: CORRECTED
3. A lack of sufficiently detailed QM reports to the Health Plan's governing body and the
delegated quality oversight committees to identify those components presenting
significant or chronic quality of care issues.
STATUS: CORRECTED
Peer Review and Quality Programs Operations Systems
The Survey Team concluded that the variation among all of the Medical Center QM programs,
extending to and including the system of peer review formed a basis for the following
deficiencies:
1.
The Medical Center Peer Review processes are not designed to consistently ensure all
quality of care problems are identified and corrected for all provider entities.
STATUS: The Plan's completed corrective actions and the corrective actions to be
summarized and submitted in its Supplemental Report, due October 1, 2007, are
sufficient to demonstrate the Plan is on the way to achieving acceptable levels of
compliance.
Final
Report
of
a
Non-Routine
Medical
Survey
Page
4
Kaiser Foundation Health Plan, Inc.
A Full-Service Health Plan
July 16, 2007
FILE NO: 933-0055
2. The Medical Center QM programs are not designed to consistently ensure all quality of
care problems are identified and corrected for provider entities.
STATUS: The Plan's completed corrective actions and the corrective actions to be
summarized and submitted in its Supplemental Report, due October 1, 2007, are
sufficient to demonstrate the Plan is on the way to achieving acceptable levels of
compliance.
The Department issued a Preliminary Report to the Health Plan on March 13, 2007. The survey
report referenced five deficiencies; three deficiencies involved Health Plan oversight
responsibility for the quality program at the regional level; and two deficiencies involved the
local Medical Center's administration of its quality programs and peer review processes.
Based on the Department's findings, on or within 30 days following notice to a plan of a
deficiency, the Health Plan was instructed to:
1. Develop and implement a corrective action plan for each deficiency, and
2. Provide the Department with evidence of the Plan's completion of or progress toward
implementing those corrective actions.
The Department granted the Health Plan a one month time extension for submitting a corrective
action plan. On May 12, 2007, the Health Plan delivered a corrective action plan to the
Department that addressed each of the five deficiencies.
Pursuant to CCR, Section 1300.80.10, where deficiencies may be reasonably adjudged to require
long-term correction or to be of a nature which may be reasonably expected to require a period
longer than 30 days to remedy, the Department may accept evidence of initiated remedial action
which is reasonably designed to lead to an acceptable level of compliance.
The Department relied on Section 1300.80.10 of the regulations to form final deficiency
determinations because the changes needed to comply with the Act constitute a fundamental
restructuring of Kaiser Health Plan's quality review oversight system and the relationships
between the Health Plan, the Hospital and the Permanente Medical Groups. The corrective
actions presented by the Health Plan have been initiated; however, complete integration and
implementation will continue over a period of weeks, months and years.
C
ORRECTIVE
A
CTIONS
The Department acknowledges the work the Health Plan has begun to address the oversight
concerns raised in this survey. The following changes have been initiated and will be
implemented over a period of weeks, months and years:
1.
A reporting process that will allow the Health Plan to review and monitor, on an ongoing
basis, health care delivery system changes instituted on the Medical Center level;
Final
Report
of
a
Non-Routine
Medical
Survey
Page
5
Kaiser Foundation Health Plan, Inc.
A Full-Service Health Plan
July 16, 2007
FILE NO: 933-0055
2.
A robust business plan process that provides for the Health Plan's Regional President
review and approval of all new or modified clinical services instituted on the Medical
Center level;
3.
A Peer Review Performance Improvement Project that will establish a uniform set of
peer review standards, define and establish a common case severity leveling system and
revise case referral and review processes to ensure physicians participating in peer review
activities within any clinical department, in either region, conducts a diligent and
objective quality review of the appropriateness of physician services and to improve
documentation of rationale, conclusions and recommended corrective actions;
4.
Training at all 29 Medical Centers to educate and orient physicians participating in peer
review on new Health Plan standards, criteria and processes in support of changes to the
peer review system and to promote consistency throughout Kaiser's clinical departments.
5.
Regular ongoing Health Plan audits of its Medical Centers' processes for evaluating and
correcting Potential Quality Issues (PQI) to ensure implementation of program changes
and ensure Medical Centers follow new policy;
6.
Regular ongoing audits of clinical department-level based peer review programs to
confirm changes have been implemented and adhere to both process and content
standards, ensuring a standard level of professional practice.
7.
New system-wide policies and procedure for the 29 Medical Centers to improve the
timely handling and appropriate review and analysis of complaints relating to the quality
of care (objective peer review), systems issues or administrative problems.
8.
Regularly scheduled semi-annual presentations, including standard reporting, by Medical
Center leaders to their respective regional Health Plan Quality Committees providing a
comprehensive overview, and a mechanism to begin comparisons among Medical
Centers; and
9.
A Member Concerns Committee (MCC) for its Medical Centers in Southern California
will report on member complaint and grievance processes, and in time, trended
information (by region, by facility, and by department) from the Southern Region. This
Committee mirrors the activities already underway in Northern California.
10.
Revised business requirements, re-configurations of computer software and development
of an access database to standardize quality review tracking systems in both Northern and
Southern California by the end of the year. The Health Plan has committed to the
purchase and installation of a new quality review tracking system in Southern California
by 2009.
Final
Report
of
a
Non-Routine
Medical
Survey
Page
6
Kaiser Foundation Health Plan, Inc.
A Full-Service Health Plan
July 16, 2007
FILE NO: 933-0055
C
ONCLUSION
The Department found the Health Plan to be in violation of Section 1370 of the Act and
implementing Rule 1300.70.
A
COPY OF THIS REPORT HAS BEEN REFERRED TO THE
D
EPARTMENT
'
S
O
FFICE OF
E
NFORCEMENT
.
Refer to Section II for further details on deficiencies and findings identified during the survey.
Refer to Appendix A for Time Line for Completing Corrective Actions
Refer to Appendix B for Quality Management (QM) System Overview
Refer to Appendix C for Survey Methodology
Refer to Appendix D for Summary of Files Reviewed.
Refer to Appendix E for a list of applicable Knox-Keene statutes and regulations.
Refer to Appendix F for a list of Acronyms used throughout this report.
Final
Report
of
a
Non-Routine
Medical
Survey
Page
7
Kaiser Foundation Health Plan, Inc.
A Full-Service Health Plan
July 16, 2007
FILE NO: 933-0055
SECTION I. OVERVIEW OF PLAN STRUCTURE
Kaiser Foundation Health Plan (the "Health Plan"), a DMHC licensed non-profit health care
service plan, provides and arranges for medical and health care services for over six million
members. The Plan offers a comprehensive and integrated health care delivery system, including
ambulatory care, preventive services, hospital care, behavioral health, home health care, hospice,
rehabilitation services, and skilled nursing services. The Health Plan divides its operation into
two geographic service areas, the northern California region, headquartered in Oakland,
California and the southern California region, headquartered in Pasadena, California.
Final
Report
of
a
Non-Routine
Medical
Survey
Page
8
Kaiser Foundation Health Plan, Inc.
A Full-Service Health Plan
July 16, 2007
FILE NO: 933-0055
N
ORTHERN
C
ALIFORNIA
R
EGION
Kaiser Permanente Northern California (KPNC) consists of three separate legal entities: (1) the
Kaiser Health Plan, (2) the Kaiser Foundation Hospital (KFH) ("Medical Center"), a 13-hospital
system and (3) The Permanente Medical Group (TPMG) ("Medical Group"), a multi-specialty
physician corporation. Each entity has an independent Board of Directors. The Health Plan
contracts with the Medical Center and the Medical Group to provide medical and other health
care professional services to over 3.3 million Northern California members and relies on their
quality review programs to identify and resolve problems within the local centers.
The Medical Centers are in a campus design that generally includes a hospital and medical
buildings and offices for out-patient services. Each of the northern California Medical Centers
has a Quality Department, responsible for the administration of the quality review program and a
Medical Center Quality Committee (MCQC) responsible for reviewing the quality of care and
services delivered by the Center.
Each service area has a Senior Vice President/Service Area Manager (appointed by the Plan's
Board of Directors), a Medical Group Physician-in-Chief (appointed by TPMG's Board of
Directors), and a Medical Center Director of Hospital Operations (appointed by KFH's Board of
Directors). These individuals serve on the Medical Centers Quality Committees and are jointly
responsible for the administrative oversight of the Northern California Medical Centers
activities.
Each MCQCs reports to its local Medical Center Executive Committee (MEC) and to the
regional Quality Oversight Committee (QOC), which is responsible for all quality programs
administered throughout Northern California Medical Centers. The QOC reports to the Quality
Health Improvement Committee (QHIC), a sub-committee for the national Kaiser Foundation
Health Plan/Kaiser Foundation Hospital Board of Directors.
S
OUTHERN
C
ALIFORNIA
R
EGION
Similarly, Kaiser Permanente Southern California (KPSC) consists of three separate legal
entities: (1) the Kaiser Health Plan, (2) the Kaiser Foundation Hospital (KFH) ("Medical
Center"), a 14-hospital system and (3) The Permanente Medical Group (SCPMG) ("Medical
Group"), a multi-specialty physician partnership. Each entity has an independent Board of
Directors. The Health Plan contracts with the Medical Center and the Medical Group to provide
medical and other health care professional services to over 3.3 million Southern California
members and relies on their quality review programs to identify and resolve problems within the
local centers.
Each of the southern California Medical Centers has a QM Department and a Medical Center
Quality Committee (MCQC) responsible for reviewing the quality of care and services delivered
by the Center. The Southern California Quality Committee (SCQC) is responsible for oversight
of the quality programs at all Southern California Medical Centers to ensure that the programs
are effective in identifying and correcting quality of care and service issues. Consistent with the
north, the SQOC reports to the Quality Health Improvement Committee (QHIC), a sub-
Final
Report
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a
Non-Routine
Medical
Survey
Page
9
Kaiser Foundation Health Plan, Inc.
A Full-Service Health Plan
July 16, 2007
FILE NO: 933-0055
committee for the national Kaiser Foundation Health Plan/Kaiser Foundation Hospital Board of
Directors.
SECTION II. DISCUSSION OF PLAN DEFICIENCIES
This non-routine survey identified five deficiencies, referenced in Tables 1 and 2 below. Table 1
identifies deficiencies at the Health Plan (regional) level relating to governance; quality oversight
activities and responsibilities. Table 2 identifies deficiencies at the local Medical
Center/Medical Group operations level relating to quality and peer review processes.
On March 13, 2007, the Plan received a Preliminary Report outlining these deficiencies. The
Health Plan was instructed to:
1. Develop and implement a corrective action plan for each deficiency, and
2. Provide the Department with evidence of the Plan's completion of or progress toward
implementing those corrective actions.
The "Status" column describes the Department's findings regarding the Plan's corrective actions.
TABLE 1
QM PROGRAM OVERSIGHT AT THE HEALTH PLAN LEVEL
SUMMARY OF SURVEY DEFICIENCIES
#
HEALTH PLAN DEFICIENCY STATEMENT
STATUS
1
In regard to the Health Plan's oversight of QM activities: The
Health Plan failed in "establishing a program to monitor and
evaluate the care provided by each contracting provider group
[both Medical Centers and Medical Groups] to ensure that the
care provided meets professionally recognized standards of
practice."[Section 1370 and Rule 1300.70(b)(2)(C)]
The Plan has
initiated remedial
action and is on its
way to achieving
acceptable levels of
compliance. [Rule
1300.80.10]
2
In regard to the Health Plan's delegating its oversight of QM
activities to its contracted Medical Centers and Medical Groups:
The Plan failed to: (1) "inform each provider [Medical Center
and Medical Group] of the plan's QA program, of the scope of
that provider's responsibilities, and how it will be monitored by
the Plan and (2) "have ongoing oversight procedures in place to
ensure that providers [Medical Centers and Medical Groups]are
fulfilling all delegated QM responsibilities."[Section 1370 and
Rule 1300.70(b)(2)(G)(1), Rule1300.70(b)(2)(G)(3)]
CORRECTED
Final
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Non-Routine
Medical
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Page
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Kaiser Foundation Health Plan, Inc.
A Full-Service Health Plan
July 16, 2007