Dive Brief:
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California’s Department of Health Care Services recently notified Kaiser Permanente of its intent to impose sanctions totaling more than $2.5 million.
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Kaiser is being fined $1,792,500 for failing to submit physician administered drugs (PADs) data, and an additional $742,500 for failing to submit encounter data as required by Medi-Cal, the state’s Medicaid program.
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The company’s computer systems were not designed to facilitate compliance with California’s reporting requirements, Nathaniel Oubre, Kaiser Permanente’s Medi-Cal vice president, stated in California Healthline.
Dive Insight:
In an industry that has spent more than a decade working to move away from paper records, it is ironic that a computer-based administrative shortcoming would result in the first fine California has levied against one of its Medicaid managed care plans in more than 15 years.
Kaiser Permanente is well known as a leader in the implementation of EMRs and collection of health data. But it can be difficult to program for a complex system. As the company pointed out in a statement, it operates multiple entities: Hospitals, medical groups, and its own health plan. Its systems are currently geared toward “quality, access and integration of care,” Oubre said.
This begs the question: given the importance of compliance and potentially steep fines, why wasn’t Kaiser’s system up to the task of reporting adequately to the state? The answer may lie in part with the way payments are structured. Rather than following a fee-for-service model, the basis of most healthcare transactions in the U.S., Medi-Cal follows a model in which the state pays a fixed fee per Medi-Cal enrollee. Deviations from standard practices will often present an obstacle for record-keeping systems.
Further, if the deviation represents a relatively small portion of the company’s business, the incentive to change a system that otherwise works is bound to be small. As of 2015, Kaiser Permanente had 10.2 million members nationwide, only 850,461 of whom were in Medicaid or CHIP. Given the shifting requirements in today’s healthcare marketplace, other payers could easily find themselves facing the same kind of reporting challenges that led to Kaiser’s new fines.