Kaiser Gets Away with Hiring Regulator Who Worked on Mental Health Failure

If Kaiser Permanente can't evade the state's scrutiny into its mental health fiasco, it will just buy the regulators doing the scrutiny. And get away with it when caught. 

On Thursday, the Fair Political Practicies Commission approved a fine for a state official who was involved in the 2012 audit of Kaiser's mental health plan and then a month later started at the HMO and worked on responding to the survey.

According to the FPPC, while working with the Department of Managed Health Care, Marcella Faye Gallagher helped pick the survey team, developed the scope of work, counselled the survey analysts, advised on documents to be requested from Kaiser, and advised on how to add value to the survey. This was the first DMHC survey focusing solely on Kaiser's mental health procedures. She also reviewed and edited the preliminary survey report.

The regulator then left and a month later helped the insurer defend itself against the audit findings by providing both verbal and written feedback in response to the audit, which had identified significant problems, including Kaiser failing to provide timely care to patients. 

As far as we can tell, there were no penalties imposed on Kaiser for hiring the regulator and allowing her to work on the same audit that it knew she worked on. With no punitive rules in place when people and companies abuse the revolving door between government and the industries they regulate, it's no wonder that companies and public employees manipulate the system. 

The health insurer paid a $4 million fine in 2014 to the DMHC based on allegations in that audit that it inadequately treated mental health patients, including long wait times to see medical professions, confusing information about how long it would take for an appointment, and that some patients were discouraged in seeking necessary medical services.The department also found that Kaiser likely violated state and federal mental health parity laws. A follow-up report by the agency in February found that some patients were still waiting too long. In addition, families of other patients who committed suicide have sued Kaiser.  
Gallagher agreed to pay a $3,000 administrative fine to the FPPC for violating a ban on state administrators taking pay to assist firms in the same audit proceedings in which they participated before leaving their state job. 
For Kaiser and state workers who move through the revolving door, that's the price of doing business. 

Capitol Watchdog is owned and operated by nonprofit Consumer Watchdog. For more information about Consumer Watchdog visit http://www.consumerwatchdog.org