U.S. Won't Cut Funding for Kaiser Kidney Services

By Charles Ornstein Times Staff Writers

September 14, 2006

Federal regulators said Wednesday that they have rescinded their threat to cut off Medicare funding for kidney services at Kaiser Permanente's San Francisco hospital.

The U.S. Centers for Medicare and Medicaid Services made the threat in June after determining that virtually every part of Kaiser's kidney transplant program in Northern California had failed patients.

The Times reported a month earlier that Kaiser imperiled hundreds of patients in 2004 when it directed them to transfer from outside transplant centers to its fledgling program in San Francisco. On May 12, Kaiser said it would close the program and shift the care of more than 2,000 patients to UC San Francisco and UC Davis Medical Centers — from which many had originally been transferred.

During an inspection triggered by the newspaper report, the Medicare agency said it found problems with the oversight of the transplant program, its protection of patients' rights and with its director of the center, placing Kaiser out of compliance with federal requirements.

If the deficiencies had not been corrected to inspectors' satisfaction, Kaiser could have lost federal funding not just for transplant patients but for all Medicare patients with end-stage renal disease treated at the HMO's San Francisco hospital.

Kaiser now meets federal requirements, the Medicare agency said, though it still must fix some minor problems.

Last month, Kaiser agreed to pay a $2-million fine to the state Department of Managed Health Care to resolve that agency's investigation. The HMO also agreed to donate $3 million to a campaign to promote organ donation.

charles.ornstein@latimes.com

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