Former Top CA Health Insurance Regulator Admits to Improperly Aiding Kaiser

The Los Angeles Times reported in January that Marcella Gallagher, a former top attorney for the Department of Managed Health Care (“DMHC”), the California body that regulates managed healthcare plans, admitted to improperly acting on Kaiser’s behalf.  Ms. Gallagher, the DMHC’s supervising attorney during a 2012 audit of Kaiser’s mental health services, was involved in the selection of the audit team, determined the scope of the audit, and guided the team through the audit.  Kaiser then hired Ms. Gallagher, and she helped it defend against the findings of the audit, which the state’s Fair Political Practices Commission found to be a violation of regulations restricting state administrators from accepting payment for helping firms through audit proceedings that they participated in as state employees.

The Kaiser audit resulted in a fine of $4 million for Kaiser’s failure to provide timely and adequate mental health services.  “It is not surprising to learn that Kaiser had improper help through the state’s audit as the resulting fine amounted to nothing more than a slap on the wrist,” according to Pasadena health insurance lawyer Scott Glovsky and author of the forthcoming book Fighting Health Insurance Denials: A Primer for Lawyers.  “Kaiser unfortunately continues to shortchange its most vulnerable members living with mental illness who to this day cannot receive from Kaiser the treatment they need to live comfortable, safe and healthy lives.”

The Law Offices of Scott Glovsky is one of the firms currently litigating a class action against Kaiser to remedy this situation in California.  In Dion v. Kaiser Foundation Health Plan, Inc. et al., Alameda Superior Court Case No. RG13697775, Scott Glovsky represents Charles Dion, who brought suit in Los Angeles Superior Court on behalf of himself and thousands of Kaiser members against Kaiser for its deficient mental health services.  The suit seeks to end Kaiser’s policy of denying regular individual psychotherapy and medically necessary residential treatment for those living with mental illness.