Kaiser Facing Two-Front Battle Against Unions, Feds

A union coalition for Kaiser Permanente healthcare workers reached a tentative labor deal with the hospital system on Friday that included across-the-board wage increases after 75,000 members took part in a three-day strike. Under the deal, new minimum wages will reach $25 per hour in California for union-represented employees over three years, and $23 per hour in other states where the company operates.

In somewhat related news, California investigated and found widespread issues with the delivery of mental health services, and a Kaiser Permanente subsidiary will now pay $200 million and overhaul access to care, as well as its oversight of medical groups.

Kaiser Foundation Health Plan had more than 9 million enrollees across dozens of California counties at the end of 2022. California law mandates that enrollees be offered mental health appointments within 10 business days of requests, and follow-up appointments within 10 days of those first appointments.

However, investigators reported that last year, only 44 percent of non-urgent follow-up appointments with Kaiser mental health providers were completed within the 10-day window. In 2022, non-urgent, follow-up individual appointments for behavioral health therapy were completed within an average of 18.1 business days after the prior appointment.

The Anti-Kickback Statute (AKS) makes it a crime to knowingly and willfully exchange (or offer to exchange) a gift or anything of value with the intent to gain something from the exchange. The U.S. Department of Health and Human Services (HHS) published an advisory opinion that said paying physician employees bonuses based on profits from certain procedures does not breach federal law. It is a new carve-out, created by HHS.

Whenever HHS carves out an exception to the AKS or the Stark law, I always wonder how many people were prosecuted in the past for the exact new exception. Another example is gift cards as rewards for consumers receiving substance abuse treatment; the practice has always been illegal.

However, a few years ago, HHS published an opinion that it would not prosecute behavioral health providers for doing exactly that. A caveat: don’t just present gift cards for showing up to treatment. Rewards based on clean urine drug results are fine, but only based on attendance. I thoroughly enjoyed showing Recovery Audit Contractor (RAC) auditors HHS’s advisory opinion on allowing gift cards.

The Centers for Medicare & Medicaid Services (CMS) has announced two new RAC targets. In August, CMS announced that RAC audits will review hip orthoses within the Reasonable Useful Lifetime: Excessive Units Automated. Last week, CMS announced that the RACs will investigate Hospice Care- Extended Length of Stay: Medical Necessity and Documentation Requirements.