Kaiser settles two lawsuits
Accused of holding back on care, the HMO will post its treatment guidelines.
By Lisa Rapaport -- Bee Staff Writer - (Published January 24, 2003)
Kaiser Permanente agreed to make public the treatment guidelines its physicians follow and to disclose how they get paid as part of a settlement of two lawsuits that accused the HMO of misrepresenting how decisions about patient care were made.

Kaiser and three consumer groups that filed the suits jointly announced the settlement Thursday.

Kaiser will post on its Web site the standards of care that its doctors consult to treat conditions ranging from asthma to visual impairment. Kaiser officials said they did not know how soon the information would be available on the site, www.kaiserpermanente.org.

During the litigation process, Kaiser also agreed to improve efforts to link each HMO member with a primary care physician and to ensure that its call-center employees do not receive financial incentives to limit or deny access to care.

The lawsuits were filed in 1999 in San Francisco Superior Court and stemmed, in part, from advertisements Kaiser ran in the late 1990s promoting itself as an HMO that placed medical decisions "in the hands of doctors." At the time, consumer groups and unions accused Kaiser of giving its doctors and call-center workers financial incentives to delay and deny care.

Kaiser and the consumer groups involved said they could not discuss all settlement details, including whether the HMO admitted any wrongdoing or paid any money to resolve the suits.

Even so, consumer advocates said all of California's 18 million HMO patients stand to gain from the settlement terms.

"I think that other health plans will have to follow Kaiser and inform the public about their clinical guidelines, their compensation of physicians, and their arrangements with call-center employees who give medical advice and schedule appointments," said Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights.

The foundation is one of the groups that sued Kaiser, along with Consumers for Quality Care and the Steven Andrew Olsen Coalition for Patients' Rights.

Kaiser's pledge to post clinical and financial information online will give patients far more information about the HMO than health plans are required to disclose under California law, said Steven Fisher, spokesman for the state Department of Managed Health Care, which regulates HMOs.

"We think this is a positive step towards patients having more information about how health care works," Fisher said.

Among other things, one of the suits alleged that Kaiser had falsely advertised that only its doctors -- and not administrators -- decided how to treat patients.

In ads that ran statewide, Kaiser claimed, "There are no financial pressures to prevent your physician from giving you the medical care you need. No one but you and your doctor decides what's right for you. We don't have insurance administrators to stand in the way of giving our members the finest medical care available."

In practice, however, the suit alleged that Kaiser tied a significant portion of doctors' pay to meeting quotas to limit medical services and applied quotas for doctors to reduce the number of patients hospitalized regardless of medical need.

Kaiser also faced accusations from union and consumer groups that its call-center employees who scheduled appointments and gave medical advice in Northern California had financial incentives to limit patients' access to care.

For most of 2000 and 2001, phone-service representatives at Kaiser call centers in Sacramento, Vallejo and San Jose could earn a bonus of up to 10 percent of their salary if they spent an average of less than three minutes, 45 seconds on each patient call and made appointments for between 15 percent and 35 percent of callers.

Since then, Kaiser has overhauled its call-center service in response to the criticism.

Bernard Tyson, senior vice president for Kaiser Foundation health plans and hospitals, said in a prepared statement that it was "gratifying to turn conflict into a productive collaboration with these important consumer groups."

"The goal of Kaiser Permanente is to work hand in hand with our members to continually improve quality of care and service," Tyson said.

Kaiser has more than 6 million members in California, including more than 550,000 in the Sacramento region.