Enforcement Action Against Kaiser Permanente

Enforcement Action Against Kaiser Permanente

Enforcement

1 Second Amended Accusation

98-126, RGR

JOAN W. CAVANAGH (#56708)

Assistant Deputy Director, Office of Enforcement

REBECCA G. RUGGERO (#165581)

Senior Counsel

JAMES NOVELLO (#172964)

Staff Counsel

CALIFORNIA DEPARTMENT OF MANAGED HEALTH CARE

980 9th Street, Suite 500

Sacramento, CA 95814-2725

Telephone: (916) 323-0435

Facsimile: (916) 323-0438

Attorneys for Complainant

BEFORE THE DEPARTMENT OF MANAGED HEALTH CARE OF THE STATE OF CALIFORNIA

THE DIRECTOR OF THE DEPARTMENT OF MANAGED HEALTH CARE

KAISER FOUNDATION HEALTH PLAN, INC. (UTTERBACK)

KAISER FOUNDATION HEALTH PLAN, INC. (SPUNBARG)

KAISER FOUNDATION HEALTH PLAN, INC. (WEST)

FILE NO: 98-126, 00-190

OAH NO: N2000070472

SECOND AMENDED ACCUSATION AND PETITION TO ASSESS

ADMINISTRATIVE PENALTIES AGAINST THE LICENSEE

HEARING DATE: January 8, 2001

HEARING TIME: 9:00 am

HEARING PLACE: 1515 Clay Street,

Room 206, Oakland, California 94612

INTRODUCTION

This case is brought pursuant to the provisions of the Knox-Keene Health Care Service Plan Ac t of 1975, as amended

(the "Act")1 based on the failure by Kaiser Foundation Health Plan, Inc. ("Kaiser"), the largest health care service plan in

California, to provide three (now deceased) Kaiser enrollees, Margaret Utterback, Wolfgang Spunbarg, and James West

with care and services as mandated by the Act.

1 The Act includes Health and Safety Code section 1340, et seq.

Kaiser failed to provide Margaret Utterback with access to care, continuity of care consistent with good professional

service, and basic health care services such as emergency care. Kaiser also failed, and continues to fail, to demonstrate

that it has the organizational and administrative capacity to provide services to enrollees by maintaining, filing and

maintaining medical records such as e-mail messages. Finally, Kaiser failed to promptly and reasonably resolve the

family’s grievance. Specifically, Kaiser failed to coordinate Mrs. Utterback’s care after an x-ray indicated that follow up

was necessary; failed, and continues to fail, to have a system in place for a medical professional to triage abdominal aortic

aneurysm2 complaints; failed, and continues to fail, to have an appointment system that prioritizes appointments with

physicians; failed to heed Mrs. Utterback’s repeated requests to see her physician once she arrived at a Kaiser clinic

sooner than her scheduled appointment; and failed, and continues to fail, to have protocols in place regarding the use of

emergency transport from a clinic to the emergency room to ensure patients are transferred timely and in accordance with

their medical needs.

Regarding Wolfgang Spunbarg, Kaiser failed to provide him with accessible health care services and continuity of care

consistent with good professional service.

Specifically, Kaiser failed to provide Mr. Spunbarg with timely and accessible emergency health care services for

treatment of his abdominal aortic aneurysm.

2 An abdominal aortic aneurysm develops when weakness in the wall of the aortic artery causes the vessel to swell. Rupture or threatened rupture of an abdominal aneurysm is a surgical emergency. If the vessel bursts, the patient can bleed to death in a short period of time. The condition normally takes many years to develop.

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Regarding James West, Kaiser failed to provide him with continuity of care consistent with good professional service.

Specifically Kaiser failed to share all pertinent information, including ready availability of medical records, relating to the

health care of Mr. West. Kaiser’s conduct in its treatment of Mrs. Utterback, Mr. Spunbarg, and Mr. West was in violation of

the Act and constitutes cause for discipline by the Director of the Department of Managed Health Care pursuant to Health

and Safety Code section 1386.

PARTIES

1. Joan W. Cavanagh ("complainant") is the Assistant Deputy Director, Office of Enforcement of the Department of

Managed Health Care. Complainant brings this action solely in her official capacity as Assistant Deputy Director, Office of

Enforcement.

2. At all times pertinent to the allegations herein, Kaiser has been a health care service plan as defined by the Act. Kaiser

is the holder of health care service plan license no. 933-0055, which was issued on November 4, 1977 by the

Commissioner of Corporations of the State of California.3 Kaiser is subject to the regulatory provisions of the Act. Kaiser’s

principal corporate office is located at 1800 Harrison Street, 8th Floor, Oakland, California 94612.

3.Until July 1, 2000, health care service plans were licensed by the Department of Corporations and subject to DOC’s

regulatory jurisdiction. Effective July 1, 2000, the Department of Managed Health Care succeeded to allduties, powers,

responsibilities and jurisdiction of the Department of Corporations regarding the Department of Corporation’s Health Plan

Program, health care service plans and the health care service plan business. Health & Safety Code § 1341.9. As of

January 1, 2001, the Department of Managed Care is now known as the Department of Managed Health Care.

JURISDICTION

3. This Second Amended Accusation is brought before the Director of the Department of Managed Health Care (the

"Department") under the authority of the following sections of the Health and Safety Code and the rules and regulations

promulgated thereunder at title 10, California Code of Regulations (the "Rules").

4. Pursuant to Health and Safety Code section 1341, the Director is vested with the responsibility for administration and

enforcement of the provisions of the Act and the rules thereunder. The statutory mission of the Department as set forth in

Health and Safety Code section 1341(a), is to ensure that health care service plans provide enrollees with access to

quality health care services and to protect and promote the interests of enrollees.

5. Health and Safety Code section 1386(a) authorizes the Director to take disciplinary action against a health care service

plan, including, but not limited to, the assessment of administrative penalties against the plan, if the Director determines,

after appropriate notice and opportunity for a hearing, that the plan has committed any of the acts or omissions which

constitute grounds for disciplinary action pursuant to the provisions of the Act.

6. Health and Safety Code section 1386(b)(6) provides that the Director may take disciplinary action against a plan when

"[t]he plan has violated or attempted to violate, or conspired to violate, directly or indirectly, or assisted in or abetted a

violation or conspiracy to violate any provision of this chapter, any rule or regulation adopted by the director pursuant to

this chapter, or any order issued by the director."

7. As set forth below, complainant alleges that Kaiser has violated or continues to violate, Health and Safety Code sections 1367(d), 1367(e)(1), 1367(i),

1368.01(a) and 1368.04(b) and California Code of Regulations, title 10, sections 1300.67,1300.67(g), 1300.67.1, 1300.67.1(a), 1300.67.1(c), 1300.67.1(d), 1300.67.1(e),1300.67.2, 1300.67.2(c), 1300.67.2(d) and 1300.68.

FACTUAL ALLEGATIONS

A. Margaret Utterback

8. On January 26, 1996, Margaret Utterback, a 74-year-old member of Kaiser Foundation Health Plan, Inc. experienced a

ruptured abdominal aortic aneurysm ("AAA") at Kaiser Hospital in Hayward after attempting to see a physician for more

than eight hours. The rupture occurred an hour after the initial diagnosis. Due to the fact that there was a unreasonable

delay in getting Mrs. Utterback transported a mere one and one half miles from a Kaiser clinic to the Kaiser emergency

room, the subsequent eight hour surgery which included transfusion of more than 20 units of blood proved futile. Mrs.

Utterback died approximately 36 hours later in the critical care unit ("CCU").

9. On January 26, 1996, Mrs. Utterback woke up suffering from right abdominal pain radiating to her back. The pain

persisted throughout the entire day as she attempted to be seen by her Kaiser physician. She made continual efforts to

obtain an appointment with her primary care physician. In doing so, Mrs. Utterback faithfully utilized the Hayward phone

system and waited more than four hours to hear back from her physician, who answered her request to be seen with a

prescription for a narcotic pain medication. After Mrs. Utterback refused the pain medication and insisted on being

examined, her daughter drove her to Kaiser’s Point Eden medical facility in Hayward at least one hour early for her

appointment, where Mrs. Utterback sat in the waiting room, moaning in obvious physical distress. Even though the

receptionist was asked several times by her daughter to try to work Mrs. Utterback in earlier due to her mother’s severe

pain, Kaiser nevertheless failed to have her examined by a doctor or nurse until approximately 4:30 p.m., 15 minutes after

her scheduled appointment.

10. Her condition was diagnosed promptly once she was seen. The aneurysm was large, approximately 10 cm in size,

and could easily be detected by touch by a physician during a physical exam. Even after Mrs. Utterback was determined to

be suffering from an dissecting abdominal aortic aneurysm ("AAA"), Kaiser failed to take prompt action to carry out the

emergency surgery she needed. Instead, a non-emergency ambulance was ordered to take Mrs. Utterback from Point

Eden Clinic to the Kaiser Hospital in Hayward at the height of rush-hour traffic. Moments after arriving at the Kaiser

Hospital emergency room in Hayward, Mrs. Utterback’s blood pressure "crashed", which indicated that her aneurysm had

ruptured. By the time Mrs. Utterback was finally taken to emergency surgery minutes later, it was too late to perform

surgery that would ultimately save her life.

11. The aneurysm burst at approximately 5:45 p.m. After surgery to attempt to repair the ruptured aneurysm, Mrs.

Utterback was sent to CCU and never regained full consciousness before dying 36 hours later.

12. Mrs. Utterback’s medical records indicate that there was an abnormality in her abdominal aorta as much as 10 years

earlier that was never followed up or investigated.

B. Wolfgang Spunbarg

13. Wolfgang Spunbarg, a 72-year old Kaiser enrollee, was taken to the Kaiser Woodland Hills Emergency Department

by his wife, Edith Spunbarg, on April 25, 2000. Mr. Spunbarg told his wife that he was experiencing severe pain in his

testicles and abdomen.

14. Upon arrival, Mr. Spunbarg walked into the emergency department while his wife parked the car. When Mrs. Spunbarg

walked in the Kaiser Woodland Hills Emergency Department, she saw her husband sitting in the waiting area with other

people. According to medical records he checked in at 11:27 p.m. on April 25, 2000. However, he did not receive an initial

exam until 11:45 p.m.

15. Mrs. Spunbarg told the receptionist in the emergency department that her husband had problems with his heart, was

taking medication, and should be seen immediately. Mrs. Spunbarg was told by the receptionist that the emergency

department was too busy and Mr. Spunbarg would have to wait.

16. Mr. Spunbarg remained in the waiting area of the emergency department for a minimum of eighteen minutes before

he was seen by a health care professional. During that time he was in severe pain and was making a moaning sound

audible to other people in the waiting area.

17. Dr. Mona Balogh was summoned by Mrs. Spunbarg while Dr. Balogh was talking to another patient. Dr. Balogh told a

nurse to assist Mr. Spunbarg. When the nurse arrived she argued with Mrs. Spunbarg for a period of time before checking

Mr. Spunbarg’s vital signs for the first time at 11:45 p.m.

18. Thereafter, at approximately 11:50 p.m., Mr. Spunbarg became unconscious and collapsed in the emergency

department. Emergency protocols were used in an attempt to save Mr. Spunbarg’s life. However, he never regained

consciousness and Mr. Spunbarg was pronounced dead at approximately 1:21 a.m. on April 26, 2000. Mr. Spunbarg’s

cause of death was listed as Abdominal Aortic Aneurysm.

C. James West

19. James West, a 62-year-old man, was diagnosed with a 6 cm abdominal aortic aneurysm on June 5, 1999.

20. Mr. West had a Kaiser primary care physician, Dr. Syed Nauqui, who referred him to Kaiser vascular surgeon Charles

Reider for treatment of the AAA.

21. Mr. West met with Dr. Charles Reider on June 15, 1999 to discuss the AAA.

22. On June 21, 1999, while undergoing a catropil renal scan at Kaiser Walnut Creek Hospital, Mr. West lost

consciousness.

23. Mr. West was taken to the emergency department and admitted to Kaiser Walnut Creek Hospital.

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24. On June 22, 1999, James West was discharged from the Kaiser Walnut Creek Hospital without any further diagnostic

testing of his AAA.

25. On June 23, 1999, Mr. West had an aortography and iliac angiogram as an outpatient at Kaiser Walnut Creek by Dr.

Ho.

26. On June 25, 1999, Mr. West arrived at a scheduled appointment with his primary care physician, Dr. Syed Nauqui. Dr.

Nauqui did not have James West’s medical chart and had no knowledge of Mr. West’s hospitalization on June 21 and

June 22.

27. On June 25, 1999, Mr. West also had an appointment with Dr. Reider. Dr. Reider had no knowledge or information

regarding James West’s hospitalization on June 21.

28. On June 27, 1999, Mrs. West took her husband, Mr. West, to the Kaiser Walnut Creek Hospital emergency room due

to severe abdominal pain.

29. A CT scan was performed on Mr. West at the Kaiser Walnut Creek Hospital by Dr. Victoria Flavell. The test showed

the aneurysm was now 6.8 cm.

30. On June 28, 1999, Mrs. West saw Dr. Charles Reider in a hallway of the Kaiser Walnut Creek Hospital. Dr. Reider

was the on-call vascular surgeon for the Kaiser Walnut Creek Hospital on June 28, 1999. Dr. Reider told Mrs. West that he

had not been informed that his patient, Mr. West, had been hospitalized on June 27, 1999.

31. Dr. Charles Reider told Mrs. West that he was currently on his way to perform surgery on another patient, but would

check on Mr. West when he was finished.

32. While Dr. Charles Reider was in surgery with the other patient, Mr. West was found pulseless and unresponsive in his

bed. The diagnosis was a ruptured AAA.

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98-126, RGR

33. Mr. West was rushed to the operating room where Dr. Charles Reider performed an attempt at abdominal aortic

aneurysm repair.

34. Mr. West never regained consciousness and died on June 29, 1999.

35. Dr. Syed Nauqui, Mr. West’s primary care physician, was not notified of James West’s hospitalization on June 27,

1999 until after he expired.

FIRST CAUSE FOR DISCIPLINE (RESPONDENT HAS VIOLATED ITS DUTY TO PROVIDE ACCESS TO CARE)

36. Health and Safety Code section 1367(e)(1) states that "All services shall be readily available at reasonable times to

all enrollees. To the extent feasible, the plan shall make all services readily accessible to all enrollees."4

37. Rule 1300.67.2 sets forth the standard for health plans to meet regarding access to care.5

4 Also, Health and Safety Code section 1367(f) requires a plan to employ and utilize allied health manpower for the furnishing of services to the extent permitted by law and consistent with good medical practice.

5 Rule 1300.67.2 states:

Within each service area of a plan, basic health care services and specialized health care services shall be readily available and accessible to each of the plan's enrollees;

(c) Emergency health care services shall be available and accessible within the service area twenty-four hours a day, seven days a week;

(d) The ratio of enrollees to staff, including health professionals, administrative and other supporting staff, directly or through referrals, shall be such as to reasonably assure that all services offered by the plan will be accessible to enrollees on an appropriate basis without delays detrimental to the health of the enrollees. There shall be at least one full-time equivalent physician to each one thousand two hundred

(1,200) enrollees and there shall be approximately one full-time equivalent primary care physician for each two thousand (2,000) enrollees, or an alternative mechanism shall be provided by the plan to demonstrate an adequate ratio of physicians to enrollees.

Utterback

38. Kaiser failed and/or continues to fail to provide enrollees with access to care in the following respects (each act forms

an independent basis for assessment of a penalty):

(a) The Kaiser telephone call center does not have a triage system for AAA thereby failing to ensure that all enrollees are

receiving all services in a readily accessible manner;

(b) Enrollees who telephone the call center are not allowed to be transferred to their physicians or to the physicians’

nurses, thereby not providing services to all enrollees in a readily accessible manner;

(c) Every time an enrollee telephones, the Kaiser call system is such that the enrollee reaches a different medical assistant
("M.A.") each time and there is no way to determine what efforts were made, if any, by the prior M.A.s to provide the

enrollee with services, such as appointments and access to advice nurses thereby failing to assure that all enrollees are

receiving all services in a readily accessible manner;

(d) The Kaiser appointment system does not have the means to prioritize same day appointments thereby failing to ensure

that all enrollees are receiving all services in a readily accessible manner;

(e) There are no guidelines for how e-mail messages are prioritized or processed once they have been sent to the clinic;

(f) When an enrollee arrives at a clinic earlier and announces to the receptionist and/or M.A. that he/she is in pain and

would like to be put in a room, lay down and/or be seen earlier, there is no Kaiser system in place to ensure that the

enrollee is triaged by an R.N. and/or a physician thereby failing to ensure that all enrollees are receiving all services in a

readily accessible manner;

(g) No medical professional spoke to and/or had any contact with Mrs. Utterback for approximately eight hours after her

first attempt to get assistance thereby failing to ensure that all services to Mrs. Utterback were available in a readily

accessible manner;

(h) Mrs. Utterback’s complaints and desires were communicated only to M.A.s who are not medically trained to perform

medical triage on a patient thereby failing to ensure that all services provided to Mrs. Utterback were available in a readily

accessible manner; and,

(i) Kaiser failed to maintain the appropriate enrollee to staff ratios at Medical Station 6 on or about January 26, 1996.

Spunbarg

39. In the case of Mr. Spunbarg, Kaiser failed, and continues to fail, to provide available and accessible emergency health

care services at the Kaiser Woodland Hills Emergency Department (each act forms an independent basis for assessment

of a penalty):

(a) Kaiser Woodland Hills Emergency Department was closed due to saturation6 when Mr. Spunbarg arrived for services;

(b) Kaiser Woodland Hills Emergency Department closes due to saturation on an average of two days per week;

emergency department is closed due to saturation; and,

(d) Kaiser Woodland Hills utilizes a receptionist, untrained in health care, to make an initial assessment of a newl y

arriving enrollee that otherwise should be seen by a health care professional.

SECOND CAUSE FOR DISCIPLINE

(RESPONDENT HAS VIOLATED ITS DUTY TO PROVIDE CONTINUITY OF CARE)

40. Health and Safety Code section 1367(d) requires that the plan furnish services in a manner providing continuity of care

and ready referral of patients to other providers at times as may be appropriate consistent with good professional

practice.

41. Rule 1300.67.1 sets forth the standard for health plans to meet with respect to continuity of care.7

6 A term meaning all beds are full and no ambulance transport patients will be accepted.

7 Rule 1300.67.1 states:

Within each service area of a plan, basic health care services shall be provided in a manner which provides continuity of care, including but not limited to:

(a) The availability of primary care physicians, who will be responsible for coordinating the provision of health care services to each enrollee;

(c) The maintenance and ready availability of medical records, with sharing within the plan of all pertinent information relating to the health care of each enrollee;

(d) The maintenance of staff, including health professionals, administrative and other supporting staff, directly or through an adequate referral system, sufficient to assure that health care services will be provided on a timely and appropriate basis to enrollees.

14 Second Amended Accusation

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Utterback

42. Kaiser failed and/or continues to fail to provide enrollees with continuity of care in the following respects (each act

forms an independent basis for assessment of a penalty):

(a) The Kaiser call center does not have a triage system for AAA thereby failing to ensure that all enrollees are receiving

all services in a manner providing continuity of care with ready referral to other providers which are appropriate and

consistent with good professional practice;

(b) No one, based on Mrs. Utterback’s symptoms, advised her to go to the emergency room thereby failing to ensure that

Kaiser furnished services in a manner providing continuity of care with ready referral to other providers which would have

been appropriate and consistent with good professional practice;

(c) Expecting M.A.s (as opposed to R.N.s or physicians) to ask enrollees appropriate questions in order to send medically

sound e-mail messages to physicians fails to ensure that Kaiser furnishes services in a manner providing continuity of

care;

(d) No medical professional spoke to and/or had any contact with Mrs. Utterback for approximately eight hours after her

first attempt to get assistance thereby failing to ensure that Kaiser furnished services in a manner providing continuity of

care with ready referral to other providers which would have been appropriate and consistent with good professional

practice;

(e) There is no documentation that Mrs. Utterback was offered an appointment with another physician. Even if she had

been, it would have been in violation of Kaiser’s own Appointment Guidelines, thereby failing to ensure that Kaiser

furnished services in a manner providing continuity of care with ready referral to other providers which would have been

appropriate and consistent with good professional practice; and,

(f) On January 26, 1996, Mrs. Utterback’s complaints and desires were communicated only to M.A.s who are not

medically trained to perform medical triage on a patient thereby failing to ensure that Kaiser furnished services in a

manner providing continuity of care with ready referral to other providers, such as those available in the emergency

department, which would have been appropriate and consistent with good professional practice.

43. Kaiser fails to maintain and have medical records readily available, with sharing within the Kaiser system of all

pertinent information relating to the health care of each enrollee in at least the following four ways:

(a) The advice nurses have no medical charts available to them at the Call Center so that adequate information cannot

either be evaluated by the R.N. or communicated to the physician;

(b) When physicians receive e-mail messages from the Call Center or the enrollee is able to secure a same day

appointment, the medical chart is not available on the premises for the physician to review prior to rendering medical care

or a medical opinion to the enrollee; and

prescribed when Mrs. Utterback was specifically seeking access to care by way of an appointment, is omitted from the

medical chart.

44. Kaiser failed to monitor the follow up of Mrs. Utterback’s health care documentation.

(a) When Mrs. Utterback’s medical records revealed abnormalities in her chest x-rays, her primary care physicians failed

to follow up on the radiologists’ comments thereby failing to ensure that Kaiser furnished services in a manner providing

continuity of care with ready referral to

other providers which would have been appropriate and consistent with good professional practice. Expecting M.A.s (as

opposed to R.N.s or physicians) to ask enrollees appropriate questions in order to send medically sound e-mail

messages to physicians fails to ensure that Kaiser furnishes services in a manner providing continuity of care.

Spunbarg

45. Rule 1300.67.1(d) provides that within each service area of a plan, basic health care services8 shall be provided in a

manner which provides continuity of care, including but not limited to the following subdivision:

"(d) The maintenance of staff, including health professionals, administrative and other supporting staff, directly or through

an adequate referral system, sufficient to assure that health care services will be provided on a timely and appropriate

basis to enrollees."

46. Kaiser failed to maintain sufficient health care professional staff to assure that health care services were being

provided on a timely and appropriate basis and consistent with good professional practice to Mr. Spunbarg (each act

forms an independent basis for assessment of a penalty):

(a) Kaiser health care professionals failed to assess the condition of Mr. Spunbarg for 18 minutes after he arrived at the

emergency department because of insufficient staffing at the Kaiser Woodland Hills facility;

(b) Kaiser Woodland Hills Emergency Department was closed due to saturation at the time Mr. Spunbarg arrived;

8 "Basic Health Care Services" is defined in Health and Safety Code section 1345(b) and includes emergency health care services in 1345(b)(6).

(d) Kaiser Woodland Hills Emergency Department requires a receptionist to triage patients when they first arrive.

West

47. Rule 1300.67.1(c) and (e) provides for,

relating to the health care of each enrollee;

(e) An adequate system of documentation of referrals to physicians or other health professionals. The monitoring of the

follow up on enrollees’ health care documentation shall be the responsibility of the health care service plan and associated

health professionals.

48. Kaiser failed to maintain and have readily available medical records, with sharing within the plan of all pertinent

information relating to the health care of Mr.

West.

(a) Kaiser failed to share information of Mr. West’s hospitalization on June 21 and June 22, 1999 with his primary care

physician, Dr. Syed Nauqui.

(b) Kaiser failed to share information of Mr. West’s hospitalization on June 21 and June 22, 1999 with his vascular

surgeon, Dr. Charles Reider.

(c) Kaiser failed to make Mr. West’s medical records available for his appointment on June 25, 1999 with his primary care

physician, Dr. Syed Nauqui.

(d) Kaiser failed to share information on James West’s hospitalization on June 27, 1999 with his primary care physician,

Dr. Syed Nauqui.

(e) Kaiser failed to share information of Mr. West’s hospitalization on June 27, 1999 with his vascular surgeon, Dr.

Charles Reider.

49. Kaiser fails to have an adequate system in place for the maintenance and ready availability of medical records with

sharing within the plan of all pertinent information relating to the health care of each enrollee.

(a) Kaiser fails to have a system in place in which pertinent information of enrollees with "high risk" medical condition can

be shared within the plan on a timely basis.

THIRD CAUSE FOR DISCIPLINE

(RESPONDENT FAILED TO PROVIDE EMERGENCY CARE SERVICES)

50. Health and Safety Code section 1367(i) states as follows, "Each health care service plan contract shall provide to

subscribers and enrollees all of the basic health care services included in subdivision (b) of Section 1345…."

51. Rule 1300.67 states: Scope of Basic Health Care Services

The basic health care services required to be provided by a health care service plan to its enrollees shall include, where

medically necessary…:

(g) Emergency health care services which shall be available and accessible to enrollees on a twenty-four hour a day,

seven days a week, basis within the health care service plan area. Emergency health care services shall include

ambulance services for the area served by the plan to transport the enrollee to the nearest twenty-four hour emergency

facility with physician coverage, designated by the Health Care Service Plan.

52. Kaiser failed and/or continues to fail to provide enrollees with emergency care in the following respects (each act

forms an independent basis for assessment of a penalty):

(a) No protocols or guidelines exist for Kaiser Hayward clinics with regard to when 911 should be activated as opposed to

an in-house call to a "hub" to contact "emergency" transport. The lack of guidelines fails to ensure that services are

available and accessible to enrollees twenty-four hours a day, seven days a week, within the health care service plan area;

(b) Not having protocols in place from 1996 through the present, regarding the use of the most emergent transportation

available to transport patients when needed to the Hayward Emergency Department, fails to ensure that services are

available and accessible to enrollees twenty-hour hours a day, seven days a week, within the health care service plan area;

and,

care services, including the appropriate ambulance services for the area served by the plan, to transport her to the nearest

twenty-four hour emergency facility with physician coverage in a timely manner. This failure to utilize the proper emergency

transport failed to ensure that all health care services were available to Mrs. Utterback in a readily accessible manner as

required by the Act.

FOURTH CAUSE FOR DISCIPLINE

(RESPONDENT FAILED TO PROMPTLY AND REASONABLY RESOLVE THE FAMILY’S GRIEVANCE)

53. Health and Safety Code section 1368.01 (for years 1996-1999)9 stated:

(a) The grievance system shall require the plan to resolve grievances within 30 days whenever possible and shall require

the plan to provide enrollees and subscribers with a written statement on the disposition or pending status of the grievance

within 30 days of the plan’s receipt of the grievance.

54. Rule 1300.68. Grievance System A plan grievance system established pursuant to the requirement of Section 1368 of

the Act shall include at least the following features:

(a) The system shall be established, pursuant to written procedures, for the receipt, handling and disposition of complaints.

An officer of the plan shall be designated as having primary responsibility for the maintenance of such procedures and for

the review of their operations and for the utilization of any emergent patterns of grievances in the formulation of policy

changes and procedural improvements in the plan's administration.

9 The current version of Health and Safety Code section 1368.01(a) is as follows:

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(e) Complaint forms and a copy of the grievance procedure shall be readily available at each facility of the plan and the

plan shall provide them to subscribers and enrollees promptly upon receipt of a request.

(g) A grievance system shall provide (1) for the acknowledgment of the receipt of a complaint and notice to the

complainant of who may be contacted with respect to the complaint within 20 days, and (2) for notice and a written

statement to the complainant of the disposition or pending status of the complaint within 30 days of the plan's receipt of the

complaint. Where the plan is unable to distinguish between complaints and inquiries, they shall be considered complaints.

(h) A grievance system shall provide for a prompt review of complaints by the management or supervisory staff

responsible for the services or operations which are the subject of the complaint.

55. Kaiser failed to provide Mrs. Utterback with an adequate grievance system in the following manner (each act forms an

independent basis for assessment of a penalty):

(a) The grievance system shall require the plan to resolve grievances within 30 days.

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(a) The complaint was not resolved in 30 days. In fact, to this date, the complaint continues to be unresolved;

(b) The Kaiser grievance system was not established, pursuant to written procedures, for the receipt, handling and

disposition of complaints. In 1996, there was no officer of Kaiser that was designated as having primary responsibility for

the maintenance of such procedures and for the review of their operations and for the utilization of any emergent patterns

of grievances in the formulation of policy changes and procedural improvements in Kaiser’s administration;

Utterback family had to create their own letter explaining its complaint;

(d) In the Utterback situation, the grievance system failed to provide (1) the acknowledgment of the receipt of a complaint

and notice to the family of whom may be contacted with respect to the complaint within 20 days, and failed to (2) give

notice and a written statement to the Utterback family of the disposition or pending status of the complaint within 30 days of

Kaiser's receipt of the grievance; and,

(e) Kaiser’s grievance system failed to provide for a prompt review of the Utterback family’s complaints by the

management or supervisory staff responsible for the services or operations which are the subject of the complaint.

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PRAYER

WHEREFORE, complainant prays that a hearing be held on the matters alleged herein and that following the hearing a

decision be rendered by the Director of the Department of Managed Health Care assessing an administrative penalty

against Kaiser Foundation Health Care, Inc. of ($1,100,000.00) One Million One Hundred Thousand dollars and ordering

such other and further relief as the Director deems proper.

Dated: February 9, 2001

______________________________________

Rebecca G. Ruggero

Senior Counsel

Attorney for Department of Managed Health Care

Enforcement

1 Second Amended Accusation

December 27, 2000

Ellen Leonard, Senior Counsel

Kaiser Foundation Health Plan, Inc.

One Kaiser Plaza

Oakland, CA 94612

RE: Assessment of Administrative Penalty Against Kaiser Foundation Health Plan, Inc.

Dear Ms. Leonard:

The Department of Managed Health Care (the "Department") has concluded an investigation in the matter of Kaiser

Foundation Health Plan, Inc. ("KFHP") and the inadvertent release of KFHP member’s confidential medical information by

KP Online in August 2000. Kaiser Permanente Online is a website through which KFHP members can access health

information, participate in discussion groups, make appointments and request advice from a nurse or ask questions of a

pharmacist. On August 2, 2000, as a result of an error in a program created to send previously undelivered e-mail, e-mail

messages intended for over 450 California KFHP members were mistakenly sent through the Kaiser Permanente Online

service to the e-mail addresses of 17 other KFHP members. KFHP promptly reported the problem to the Department and

contacted all of the involved members. The 17 members who were sent the e-mail messages reported that either they

never received the messages or that they had deleted them.

The Department’s investigation has found that the error was inadvertent, that KFHP acted promptly to mitigate any harm,

and has implemented corrective measures to reduce the likelihood of such an event happening again. Nevertheless, the

Department has concluded that a violation of the Knox-Keene Act did occur.

Therefore, the Department finds that KFHP has violated Health and Safety Code Section 1386 (b)(15) and imposes an Administrative Penalty in the amount of

State of California

Gray Davis, Governor

Business, Transportation and Housing Agency

980 Ninth Street

Suite 500

Sacramento, CA 95814

916-324-3669

jnovello @ dmhc.ca.gov e-mail

Ellen Leonard

Kaiser Foundation Health Plan, Inc.

December 22, 2000

Page 2

$25,000.00. The amount of the fine is less than that which the Department would have otherwise sought had KFHP not

been forthcoming about the incident, and had it not taken steps to remedy the problems resulting from the error. It is the

Department’s understanding that KFHP has concluded that it is in their best interest, and the interest of its members, to

resolve the matter at this time by paying the fine. Thank you for cooperation and speedy resolution of this matter.

Sincerely,

James Novello

Staff Counsel

Department of Managed Health Care

Enforcement

WILLIAM KENEFICK (#59588)

Acting Commissioner of Corporations

G. LEWIS CHARTRAND, JR. (#124389)

Supervising Corporations Counsel

REBECCA G. RUGGERO (#165581)

Corporations Counsel

JOAN W. CAVANAGH (#56708)

Senior Corporations Counsel

CALIFORNIA DEPARTMENT OF CORPORATIONS

980 9th Street, Suite 500

Sacramento, CA 95814-2725

Telephone: (916) 323-0435

Facsimile: (916) 323-0438

Attorneys for Complainant

BEFORE THE DEPARTMENT OF CORPORATIONS OF THE STATE OF CALIFORNIA

In the Matter of the Accusation and Notice of Intent to Assess Administrative Penalties Against KAISER FOUNDATION HEALTH PLAN, INC. (UTTERBACK).

Respondent

FILE NO: 933-0055

OAH NO:

ACCUSATION AND PETITION TO

ASSESS ADMINISTRATIVE PENALTIES

AGAINST THE LICENSEE

PRE-HEARING CONFERENCE

DATE:

TIME:

DEPT:

HEARING DATE:

TIME:

DEPT:

-i- Accusation

98-126, RGR

TABLE OF CONTENTS

In The Matter of the Accusation and Notice of Intent to

Access Administrative Penalties Against

Kaiser Foundation Health Plan, Inc. (Utterback)

I. Introduction ................................................1

II. Jurisdiction ................................................2

III. Statement Of Facts ..........................................3

A. Margaret Utterback ......................................3

B. Abdominal Aortic Aneurysms...............................4

C. The Morning Of January 26, 1996 And Mrs. Utterback’s

Calls To Kaiser .........................................5

D. The First Long Wait .....................................8

E. Mrs. Utterback’s Contact With Medical Professionals

Prior To Arriving At The Clinic And The Failure To

Follow Appointment Guidelines...........................10

F. The Long Wait At the Kaiser Clinic ......................10

G. The Rapid Diagnosis ....................................11

H. The Effect Of Kaiser’s Failure To Instigate Standard

AAA Protocols ..........................................13

I. The Rupture And The Emergency Surgery ...................14

J. Mrs. Utterback’s Last Hours Of Life .....................14

K. The Family’s Futile Attempts To Get Answers From

Kaiser Through Its Grievance Process ....................15

IV. Kaiser’s Violations Of The Knox-Keene Health Care Service

Plan Act And The California Code Of Regulations .............20

A. Kaiser’s Phone System, E-Mail System, Appointment

Guidelines, Understaffing And Lack Of Documentation

Created Barriers To Access To Care .....................20

i. Controlling Authority.............................20

a. Access To Care................................20

b. Continuity Of Care ............................21

-ii- Accusation

98-126, RGR

ii. Kaiser’s Phone And E-Mail System .................21

iii. Kaiser’s Appointment System .......................23

iv. Kaiser’s Understaffing ............................24

v. Kaiser’s Inadequate Documentation .................25

B. Kaiser Failed to Provide Basic Health Care Services

Mandated by Knox-Keene.................................25

i. Controlling Authority For Preventive Care .........25

ii. Kaiser’s System For Providing Preventive Care......27

iii. Controlling Authority For Emergency Care ..........28

iv. Kaiser’s System For Emergency Care ................30

C. Kaiser Failed To Demonstrate That It Has

Organizational And Administrative Capacity To

Provide Services To Enrollees, Including The

Maintenance Of Medical Records .........................31

D. Kaiser Failed To Promptly And Reasonably Resolve The

Family’s Grievance ....................................33

V. Disregard For The Requirements Of The Act Make It

Necessary To Assess Administrative Penalties ................37

-iii- Accusation

98-126, RGR

TABLE OF AUTHORITIES

In The Matter of the Accusation and Notice of Intent to

Access Administrative Penalties Against

Kaiser Foundation Health Plan, Inc. (Utterback)

Statutes

Health & Safety Code section 1345(b)(5)....................3, 25, 38

Health & Safety Code section 1345(b)(6)....................3, 28, 38

Health & Safety Code section 1367(e)(1)....................3, 20, 38

Health & Safety Code section 1367(d).......................3, 21, 38

Health & Safety Code section 1367(f).......................3, 20, 38

Health & Safety Code section 1367(g).......................3, 31, 38

Health & Safety Code section 1367(i).......................3, 25, 38

Health & Safety Code section 1367.69(b)....................3, 25, 38

Health & Safety Code section 1368.01(a)....................3, 33, 38

Health & Safety Code section 1368.04(b)................3, 33, 34, 38

Health & Safety Code section 1386.........................37, 38, 39

Regulations