Corporate Compliance

Kaiser ordered to pay $1.9 million to settle fraud allegations

Compliance Monitor, April 20, 2005

U.S. and state attorneys general ordered three divisions of Kaiser Permanente to pay $1.9 million in penalties for improper Medicare and Medicaid claims, Pacific Business News reported April 15.

Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, and the Hawaii Permanente Medical Group must pay $1 million to settle Medicare allegations and $900,000 to Medicaid for problems related to an employee practicing dermatology without a license from 1984 to 2001, Pacific Business News reported. The Medicaid Fraud Control Unit confirmed the alleged fraud in a statement from Hawaii Attorney General Mark Bennett.

According to the state, Kaiser billed Medicaid for services even though they were rendered by an unlicensed physician assistant. The Hawaii attorney general's office also said that Kaiser didn't properly supervise these treatments, but it did not find any evidence of improper care, the Pacific Business Journal reported.

A Kaiser employee who blew the whistle on the fraud will receive $225,000, according to the report.