The U.S. Department of Labor announced on Tuesday that it has reached a settlement with Kaiser Foundation Health Plan to resolve several investigations into the health plan's practices for mental health and substance use disorder services. The Labor Department said the agreement addresses allegations that Kaiser did not maintain sufficient provider networks for these services and that it improperly relied on patient responses to questionnaires when denying care.
Under the terms of the settlement, Kaiser will provide at least $28 million in compensation to cover costs incurred by members who sought out-of-network mental health and substance use disorder treatment. In addition, the company will pay a $2.8 million penalty to the federal government, according to the Labor Department's statement.
As part of the agreement, Kaiser has committed to revising policies and procedures to address the issues raised in the investigations. The Labor Department said the reforms include measures intended to reduce appointment wait times and to improve care review processes so that members receive medically necessary care.
In an emailed response, the company said it has implemented numerous improvements to its mental health care delivery system and acknowledged that there remains additional work to align interventions and therapies with members' expectations and to achieve the best patient outcomes. The company also stated that the settlement does not involve current practices or issues.
The settlement therefore includes both monetary remediation for members who paid for out-of-network services and operational changes Kaiser has agreed to make to its network access and utilization review processes. The Labor Department framed the agreement as a resolution to the multiple probes into network adequacy and the use of patient questionnaire responses in coverage decisions.
Details released by the Labor Department highlight two primary elements of the settlement: financial compensation for affected members and commitments by Kaiser to reform internal procedures related to access and clinical review. The company will satisfy the financial component through the at-least $28 million reimbursement fund and the $2.8 million civil penalty. The operational commitments are intended to address appointment availability and the handling of reviews that determine medical necessity.
Context note: The information above reflects the terms and statements contained in the Labor Department's announcement and Kaiser’s emailed response. The settlement resolves the specific investigations referenced by the Labor Department.