State Steps In on Kaiser Transplants

The state’s top HMO regulator said late Tuesday that Kaiser Permanente would pay for kidney transplants at outside hospitals for patients dissatisfied with Kaiser’s troubled new transplant program in Northern California.

“Let me put it this way, they will do what the patients want them to do,” said Cindy Ehnes, director of the California Department of Managed Health Care, in an interview.

Kaiser, the nation’s largest HMO, “will be ending up financially responsible for transplants that are received in other institutions,” she said.

The arrangement is part of an agreement with Kaiser that will be formally announced today at a news conference in Oakland, Ehnes said.

The scope of the agreement was not entirely clear. At the very least, it will allow up to 1,200 patients to return to UC Davis or UC San Francisco, where they had been awaiting transplants before Kaiser opened its own center in San Francisco in 2004. The UC hospitals had been caring for Kaiser patients under contract.

It was unclear whether about 850 patients who joined Kaiser’s waiting list more recently would also be allowed to switch programs.

The deal stems from reports in The Times last week that described how Kaiser patients were imperiled when the HMO directed its patients to transfer from established transplant centers to its fledgling program in San Francisco.

The number of transplants dropped sharply, leaving many patients on prolonged dialysis, which can lead to fatal complications and reduce prospects for a successful transplant later.

Hundreds of patients were stuck in limbo for months -- with little hope of receiving new kidneys -- because Kaiser failed to properly handle paperwork transferring them to its new program. And 25 Kaiser patients who had been treated at UC San Francisco were denied the chance to receive kidneys that were nearly perfectly matched to them because Kaiser directed the university to reject the organs during the transition between programs.

Mary Ann Thode, president of the Northern California region of Kaiser Foundation Health Plan and Hospitals, said late Tuesday that HMO officials had a “really good, productive meeting” with state regulators. But she declined to comment on the agreement they reached until today’s news conference.

Darlis Beale, a 57-year-old retired teacher awaiting a transplant, said she was relieved that Kaiser was easing its restrictions. “Had Kaiser not taken over the process approximately two years ago, my transplant in all likelihood would have been done before now,” she said. “I have spent over a year and a half on hemodialysis, and it just eats up my life.”

Kaiser members are part of a unique health care entity that runs both a health plan and a hospital system. Except in rare circumstances, members get their care from Kaiser hospitals and affiliated Permanente medical group doctors only.

UC Davis and UC San Francisco said Kaiser had not contacted them officially about plans to allow patients to return, but officials at both medical centers have been discussing the possibility internally in recent days.

UC San Francisco is more than willing to “work with Kaiser to allow for transition of patients back to UCSF in a way that will be safe and in the best service of the patients’ interest,” said Dr. Stephen Tomlanovich, medical director of the university’s renal transplant service.

Tomlanovich said, however, that he and other transplant officials want to ensure that patients, who may be nervous, will not be lost in any move back to UC San Francisco.

“What we want to do is make sure the process is well defined and every patient will know where they stand in the transfer back to our care,” he said.

UC Davis spokeswoman Carole Gan said in an e-mail: “We have started to think about how a large influx of patients might possibly impact our program and how we’d ensure that patients are treated fairly and receive the highest quality of care.”

Previously, Kaiser had paid outside hospitals a discounted rate of about $65,000 per kidney transplant.

Ehnes said her department would step in if patients felt that Kaiser was not responding appropriately to their requests for transfer.

The managed care department plans to step up its oversight of Kaiser’s transplant unit in other ways, she said. The agency, for instance, will oversee an independent panel of experts that Kaiser has said it will assemble to review its transplant program and make recommendations for improvement.

The department will also coordinate its activities with other regulators, including the state Department of Health Services and the U.S. Centers for Medicare and Medicaid Services, both of which are investigating Kaiser’s program.

“The amount of handholding that will go forward from this point will be extreme,” Ehnes said. “Kaiser is very committed to getting their house in order here.”

Ehnes said her agency’s review had uncovered other potential lapses by the Kaiser program, such as its failure to receive prior approval from the managed care department for moving transplant patients in the first place. The agency requires health plans to receive approval before they implement “material” changes.

“In retrospect, it clearly was material, without question,” Ehnes said of Kaiser’s massive start-up. Kaiser has agreed to now file detailed information on the new center.

Some Kaiser patients said Tuesday that they had already seen a change in Kaiser’s approach.

Judi Franich, 59, a longtime Kaiser patient, has refused for two years to transfer to the HMO’s new transplant program from UC San Francisco, where she had long been treated. In response, Kaiser officials repeatedly denied her requests to have her surgery performed through the university’s program.

On Sunday, she sent a fax to Dr. Sharon Inokuchi, medical director of Kaiser’s kidney program, once again demanding to receive her transplant at UC San Francisco.

On Tuesday morning, Inokuchi called to say that her request had been approved, Franich said.

“I’m just delighted,” Franich said. “There’s no doubt in my mind if that story hadn’t broken, I would never have been allowed to move.”

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Tracy Weber may be contacted at tracy.weber@latimes.com and Charles Ornstein at charles.ornstein@latimes.com.