Kaiser Marketing Practices Investigated
State regulators are investigating Kaiser Permanente's Southern California operation for allegedly deceptive marketing practices related to the upcoming transfer of about 18,000 Coachella Valley patients from outside doctors to the HMO's staff physicians.
The California Department of Managed Health Care is looking into whether Kaiser misled members into believing that they could continue seeing their current primary care doctors when, in fact, that will no longer be the case after June 30.
"We are investigating the situation for a potential violation of the Health and Safety Code," managed care agency spokeswoman Lynne Randolph said. Kaiser has until Friday to respond to the agency's request for information.
Generally, Kaiser members must get their care only from Kaiser hospitals and affiliated Permanente medical group doctors. But until now, Kaiser has not had clinics in the Coachella Valley, and its local members have been allowed to see non-Kaiser doctors under contract with the HMO.
On July 1, Kaiser will open its own medical offices in Palm Desert, Palm Springs and Indio with 11 doctors whom most Kaiser members must see for primary care. But the managed care department is concerned that the HMO was not sufficiently forthright about that requirement.
The investigation comes at a sensitive time for Kaiser, the nation's largest HMO, following a scandal involving its kidney transplant program in Northern California. Officials required about 1,500 patients awaiting kidney transplants to leave established outside programs in 2004 and join Kaiser's new program in San Francisco.
Delays and confusion abounded, and the number of transplants performed on Kaiser patients plummeted. Kaiser announced earlier this month that it would close its transplant unit and shift all of its patients back to the outside hospitals.
Kaiser officials in Southern California said the HMO has been upfront with patients about what to expect.
"As far as I can tell, we really have done things according to what the [managed care] department wanted us to do," said Dr. Benjamin Chu, president of the Southern California region of Kaiser Foundation Health Plan and Hospitals. "When I reviewed the communications, I don't see any false marketing."
Chu said Kaiser has been running a marketing campaign since last fall to inform members about the changes.
