The U.S. Department of Labor has reached a settlement with Oakland, Calif.-based Kaiser Foundation Health Plan to resolve its investigations into the company’s alleged failure to provide timely and appropriate access to mental health and substance use disorder services.
The settlement affects millions of Kaiser members in California who receive coverage through their employer and establishes a claims process for eligible members to seek reimbursement for certain out-of-network expenses tied to mental health and substance use disorder care, according to a news release.
Federal investigators alleged Kaiser did not maintain adequate provider networks for mental health and substance use disorder services, and used patient questionnaire responses to improperly prevent patients from receiving care. As a result, some members sought out-of-network services and incurred higher out-of-pocket costs, according to the release.
Earlier this year, Kaiser was fined by Washington state for failing to comply with federal parity rules, and was among 11 insurers fined by Georgia for violating similar state law.
Under the agreement, Kaiser will pay at least $28.3 million to cover costs members incurred when seeking out-of-network mental health and substance use disorder services. The company will also pay a $2.8 million penalty to the federal government.
Kaiser also agreed to reform policies and practices aimed at improving access to mental health and substance use disorder care, including reducing appointment wait times, improving care review processes and monitoring network adequacy.
The department’s review covered a period that ended in 2023 and the settlement agreement extends the reimbursement time period for an additional year.
Kaiser Permanente said in a statement to Becker’s the settlement does not involve current practices or issues and noted that over the past six years, surges in demand doubled behavioral health visit volume amid the pandemic. Kaiser also cited an ongoing shortage of qualified mental health professionals and a 10-week strike in 2023 by 2,000 mental health clinicians.
“We have made many enhancements to our mental health care delivery system and acknowledge there is still work to be done to ensure our interventions and therapies are aligned with our members’ expectations and to ensure we achieve the best patient outcomes,” Kaiser Permanente said in a statement.
