EGGLESTON, SIEGEL & LeWITTER
JAMES E. EGGLESTON #98772
1330 Broadway, Suite 1700
Oakland, CA 94612
(510) 451-9500
(510) 834-7111 (fax)
Attorneys for Plaintiff
California Nurses Association
IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF CONTRA COSTA
CALIFORNIA NURSES ASSOCIATION,
on behalf of its members and the Kaiser Permanente Health Plan members,
Plaintiffs,
v.
KAISER FOUNDATION HEALTH PLAN, KAISER FOUNDATION HOSPITALS,THE PERMANENTE
MEDICAL GROUP, INC., THE PERMANENTE COMPANY, and THE PERMANENTE FEDERATION,
dba KAISER PERMANENTE MEDICAL CARE PROGRAM; THE CALIFORNIA DEPARTMENT OF
CORPORATIONS; BRIAN A. THOMPSON, in his official capacity as Acting Commissioner;
THE CALIFORNIA DEPARTMENT OF HEALTH SERVICES; and SANDRA SMOLEY, in her
official capacity as Director; and DOES 1-20, inclusive,
Defendants.
_____________________________________
)))))))))
))))))))))))))) )
CASE NO.
PETITION FOR PEREMPTORY WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY
AND INJUNCTIVE RELIEF
[C.C.P. § 1085; Bus. And Prof. Code § 17203]
I. PRELIMINARY STATEMENT
1. This action seeks
to remedy a health care crisis occurring throughout Northern California
including Contra Costa County created in large part by an unlawful, commercially
motivated scheme of Kaiser Permanente Medical Care Program to substantially
reduce acute care and emergency health services, and tacitly sanctioned
by deliberate inaction and omission of the California Department of Corporations
("DOC") and California Department of Health Services ("DHS").
2. Kaiser Permanente
Medical Care Program ("Kaiser") is an international health care conglomerate
consisting of fully integrated operations of various non-profit and for-profit
business entities which operates on a consolidated basis as a for-profit
enterprise and generates over $20 billion in annual revenues. Kaiser is
licensed as an HMO and direct provider of health care services in California
and serves over 2.7 million health plan enrollees in Northern California.
3. Over the past few
years, Kaiser has undertaken a commercially motivated plan to withdraw,
reduce and eliminate cortically needed acute care and emergency health
services in Northern California. Kaiser’s plan includes the phased reduction
of emergency health services and deactivation of licensed acute care beds
leading to the complete closing of acute hospitals including Kaiser hospitals
in Richmond, Martinez and Oakland. Kaiser’s implementation of this plan
has resulted in the withdrawal and abandonment of 46% of the licensed acute
care bed capacity of its three Contra Costa County acute hospitals in Richmond,
Martinez and Walnut Creek. The closing of Kaiser’s Richmond and Martinez
facilities will result in additional reductions in licensed beds and burden
an already overburdened County emergency health system with an additional
emergency load in excess of 75,000 patients annually.
1. Kaiser’s health care service reduction plan has been
undertake in violation of its obligations as an HMO under the Knox-Keene
Act and DOC regulations and its statutory duties as an operator of health
facilities licensed by DHS. The DOC and DHS have failed and refused to
perform mandatory statutory obligations to undertake meaningful investigation
and appropriate corrective actions to halt Kaiser’s unlawful health care
service reduction scheme and remedy the health care crisis and resulting
harm created by the scheme.
2. Plaintiff California Nurses Association seeks declaratory
and injunctive relief to compel the performance of mandatory statutory
duties by DOC and DHS and to enjoin Kaiser’s unlawful and dangerous plan
to reduce critically needed acute care and emergency health services.
II. PARTIES
3. Plaintiff California Nurses Association ("CNA") was
formed in 1901 and was
created and exists and operates for various
purposes, including to establish and promote standards of nursing practice
and patient care, to initiate and support quality health care and protect
nursing practice in the state of California, and to represent Registered
Nurses in relations with their employers concerning terms and conditions
of employment and standards of professional practice and patient care.
CNA has long been recognized as a leader in California in developing the
professional role of Registered Nurses in meeting new and changing needs
of patient care, and in assisting the legislature, licensing boards and
health regulatory agencies in responding to new developments in health
care. CNA has assumed an active and very public role in the current debate
in health care reform and ongoing controversies over the danger to the
public health and risks to patients arising from the growing commercialization
of health care and hospital industry restructuring and resulting erosion
of patient care standards, elimination of health care services, and increasing
restrictions on access to adequate and necessary health care services.
CNA represents 7.500 registered nurses employed by Kaiser in Northern California.
The vast majority of these members and their families are enrolled in Kaiser
health plans and receive health care services from Kaiser.
4. Defendant Kaiser Foundation Health Plan, Inc., ("KFHP")
is a tax-exempt
California public benefit corporation,
licensed under the Knox-Keene Act as a health care plan. KFHP serves as
a non-profit front organization and cover for the commercial, for-profit
operations of the Kaiser Permanente Medical Care Program. KFHP has 2.8
million health plan enrollees/members in Northern California. Defendant
KFHP does business in the County of Contra Costa, California.
5. Defendant Kaiser Foundation Hospitals ("KFH") is a
tax-exempt California
public benefit corporation, licensed
by the Department of Health Services to operate health care facilities,
including acute care hospitals. Defendant KFH, together with KFHP serves
as a non-profit front organization and cover for the commercial, for-profit
Kaiser Permanente Medical Care Program. Defendant KFH does business in
the County of Contra Costa, California.
6. Defendant The Permanente Medical Group, Inc. ("TPMG")
is a private, for-profit
physician-owned corporation which provides
medical services to Kaiser Health Plan members and serves as a vehicle
for the secret, undisclosed extraction and distribution of profit from
the consolidated operations of the commercial, for profit enterprise known
as the Kaiser Permanente Medical Care Program. Defendant TPMG does business
in the County of Contra Costa, California.
7. Defendant The Permanente Federation ("TPF") is a private,
for profit corporation which governs Permanente Medical Groups around the
country including TPMG. TPF was created in 1996 and exists and operates
for the purpose, inter alia, of assisting in the secret, undisclosed extraction
and distribution of profits from the consolidated operation of the commercial,
for profit enterprise known as Kaiser Permanente Medical Care Program.
Defendant TPF does business in the County of Contra Costa, California.
8. Defendant The Permanente Company, ("PermCo") is a for
profit subsidiary
corporation of TPF that was created in
1996 and exists and operates for the purpose, inter alia, of assisting
in the secret, undisclosed extraction and distribution of profits from
the consolidated operations of the commercial, for profit enterprise known
as Kaiser Permanente Medical Care Program. Defendant PermCo does business
in the County of Contra Costa, California.
9. Defendant Kaiser Permanente Medical Care Program ("Kaiser"
or "KPMCP") is the
commercial name and affiliated business
form under which defendants KFHP, KFH, TPMG, TPF, and PermCo operate together
with several affiliated non-profit, tax exempt entities and for profit
entities and ventures as a single commercial enterprise. This single, integrated
Kaiser operation is a for profit enterprise which generates billions of
dollars in annual revenues (more than $20 billion in 1996) through its
consolidated operations. Kaiser conceals its substantial profits from public
disclosure using its tax exempt front organizations including KFHP and
KFH as a cover, and secretly extracts and distributes hidden profits through
its various integrated, for profit operations. KPMCP does business in the
County of Contra Costa, California.
10. Defendants KFHP, KFH, TPMG, TPF and PermCo operate as a
"Health Service
Plan" within the meaning of § 1345(f)
of the Health and Safety Code under the license of defendant KFHP issued
by the Department of Corporations in accordance with § 1349 of the
Health and Safety Code. These individual defendant entities are all "affiliates"
and operate "under common control" within the meaning of applicable regulations
of the Department of Corporations. 10 C.C.R. § 1300.45(c) and (b).
This single, fully integrated Kaiser health care conglomerate does business
as a licensed health care service plan under the name of Kaiser Permanente
Medical Care Program.
11. The ultimate authority and governance of the integrated,
consolidated Kaiser
operation consists of a complex web of
common directors, officers, and shareholders of affiliated non-profit and
for profit corporations which together constitute the "governing body"
of Kaiser acute care hospital operations within the meaning of regulations
of the Department of Health Services. 22 C.C.R. § 70035. The Kaiser
entity defendants operate the Kaiser acute facilities under a license issued
by defendant Department of Health Services to defendant Kaiser Foundation
Hospitals pursuant to § § 1251, 1253, and 1254 of the Health
and Safety Code.
12. The defendant, Department of Corporations ("DOC"), through
the Commissioner of
Corporations is responsible for the administration
and enforcement of the Knox-Keene Health Care Service Plan Act of 1975.
H & S Code § 1341. Defendant Brian Thompson is the Acting Commissioner
of Corporations and is sued in his official capacity.
13. The defendant, Department of Health Services ("DHS") is
responsible for the licensing and certification of health facilities including
acute hospitals, and for promulgating regulations, implementing statutory
licensing requirements and enforcing statutory and regulatory provisions
covering the operation of health facilities. See, e.g., H & S Code
§§ 208, 1250, 1251, 1253, 1265. Defendant Sandra Smoley is the
Director of the Department of Health Services and is sued in her official
capacity.
14. The true names and capacities of defendants named as Does
1 through 20,
inclusive are unknown to plaintiff who, therefore sues said defendants
by such fictitious names. Plaintiff is informed and believes and thereon
alleges that each of the defendants designated herein as a Doe may properly
be named herein by reason of actions and/or omissions hereinafter alleged.
Plaintiff will ask leave of the Court to amend this complaint in order
to insert the true names and capacities of said defendants and to join
said defendants in this action when the same have been ascertained.
III. GENERAL ALLEGATIONS
1. Relevant Statutory and Regulatory Standards
1. Kaiser is required
to provide certain basic health care services to its Health Plan
enrollees
and to insure these services are available and accessible to enrollees
in their service areas (areas of residence and employment). H & S Code
§§ 1367(i) and 1345(b). These basic mandatory services include
"general nursing care . . . intensive care unit and services, drugs, medications
. . . special duty nursing as medically necessary . . . . 10 C.C.R. §
1300.67(b). Kaiser is also required to provide its Health Plan enrollees
and insure available and accessible emergency health care services on a
24-hour a day, 7 days a week, basis within their health care service plan
areas. 10 C.C.R. § 1300.67(g). Such emergency health care services
must include ambulance services for the areas served by the Kaiser Health
Plan to transport enrollees to the nearest 24-hour emergency facility with
physician coverage designated by the Kaiser Plan. 10 C.C.R. § 1300.67(g).
2. The Knox-Keene
Act requires that all Kaiser health care services shall be readily available
at reasonable times to all enrollees." H & S Code § 1367(e). Regulations
of the Department of Corporations implementing Knox-Keene Act Standards
required to be met by Kaiser mandate the accessibility of required services:
Within
each service area of a plan, basic health care services and specialized
health care services shall be readily available and accessible to each
of the Plan’s enrollees:
(a) The location of facilities providing
the primary health care services of the Plan shall be within a reasonable
proximity of the business or personal residences of the enrollees, and
so located as to not result in unreasonable barriers to accessibility;
. . . . . . . . . . . . .
(c) Emergency care services shall be
available and accessible within the service area 24 hours a day, 7 days
a week;
(d) The ratio of enrollees to staff,
including health professionals, . . . shall be such as to reasonably assure
that all services offered by the Plan will be accessible to enrollees on
an appropriate without delays detrimental to the health of the enrollees.
. . . 10 C.C.R. § 1300.67.2.
1. The Knox-Keene Act requires that all facilities to
be utilized by Kaiser Health Plan members shall be licensed by the Department
of Health Services, if such license is required by law and shall conform
to all licensing and operational requirements for the provision of health
care services to Kaiser Health Plan enrollees. H & S Code § 1367(a).
The Act also requires that all personnel employed by or under contract
to Kaiser shall be licensed or certified by their respective board or agency
where such license or certification is required by law. H & S Code
§ 1367(b). Kaiser must be able to demonstrate that medical decisions
are rendered by qualified medical providers, without interference by fiscal
and administrative management. H & S Code § 1367(g).
2. The Knox-Keene Act imposes on defendant Department
of Corporations an
obligation to regularly evaluate and
obtain correction of deficiencies in the delivery of health care services
to Kaiser Plan enrollees. Such evaluation must include a "review of the
procedures for obtaining health services, the procedures for regulating
utilization, peer review mechanisms, internal procedures for insuring quality
of care, and the overall performance of the Plan in providing health care
benefits and meeting the health needs of the subscribers and enrollees."
H & S Code § 1380(a). Upon DOC
discovery or determination of deficiencies in the delivery of health care
services, DOC is required to provide notice to the licensed health care
service plan and afford a reasonable time to the Plan to correct the deficiencies.
A failure or refusal by the Plan to correct noted deficiencies within the
prescribed time is cause for disciplinary action against the Plan. H &
S Code § 1380(g).
3. Disciplinary action includes suspension and revocation
of the DOC license to
operate as a health care service plan
and the assessment of civil penalties. H & S Code § 1386(a). DOC
may also issue an order directing a plan or its representatives to cease
and desist from engaging in practices violative of the Knox-Keene Act and
may institute civil actions for injunctive and equitable relief, including
the appointment of a receiver to assume control of a defendant plan’s assets
and operations. H & S Code §§ 1391, 1392.
4. Prior to any material modification of its plan or operations,
Kaiser must give notice to and receive specific approval for the proposed
modification. H & S Code § 1352(b).
5. The Department of Health Services issues "licenses"
for the operation of health facilities upon application and demonstration
of competence and ability to provide services for which a license is requested.
H & S Code § 1265. The license issued by DHS constitutes the basic
permit to operate a health facility with a specifically authorized number
and classification of beds. H & S Code § 1251; 22 C.C.R. §
70041. DHS is authorized, and has promulgated, regulations defining bed
classifications for health facilities subject to its licensing and regulatory
authority. H& S Code § 1250.1. The DHS has determined that general
acute care bed classification includes beds designated for burn, coronary,
intensive care, medical-surgical, pediatric, peri-natal, rehabilitation,
acute respiratory or tuberculosis patients receiving 24-hour medical care.
22 C.C.R § 70034(a), 70042(a)(1). A licensed, general acute care hospital
may also be licensed by DHS to provide special or supplemental services
including basic emergency medical services, comprehensive emergency medical
services and standby emergency medical services. H & S Code §§
1255, 1256.1; 22 C.C.R. § 70067, 70411, 70451, 70653.
6. A licensed health facility, including an acute care
hospital may voluntarily suspend on a temporary basis, the use of a portion
of its licensed bed capacity upon proper notice and review by DHS. The
licensed health facility is prohibited from using "voluntary suspension"
authority to deactivate licensed beds. H & S Code § 1271.1(a);
22 C.C.R. § 70131.
7. A licensed health facility is required to apply and
receive DHS approval for a variety of operational changes affecting the
availability of health care services authorized by the license including
an increase or decrease of licensed bed capacity, a change in location
of hospital services, or a change of bed classification. 22 C.C.R. §
70105.
8. DHS is required to periodically inspect each licensed
health facility as often as necessary to insure the quality of care being
provided and no less than once every two years.
H & S Code § 1279; 22 C.C.R. § 70101(c). In the event
DHS discovers deficiencies of compliance with licensing requirements, it
"shall notify the hospital of all deficiencies of compliance . . . and
the hospital shall agree with the department upon a plan of correction
which shall give the hospital a reasonable time to correct such deficiencies."
22 C.C.R. § 70101(e). Failure to correct the deficiencies is the basis
for action by DHS to suspend or revoke the health facility license. H &
S Code 1294; 22 C.C.R. § 70101(e).
1. The Current Health
Care Crisis in Contra Costa County Created by the Planned Withdrawal of
Needed Services for Commercial Purposes
1. Over the past few
years, Kaiser has led the hospital industry in Northern California including
Contra Costa County in implementing a commercially motivated plan to withdraw
and eliminate critically needed health care services. The plan includes
the following elements:
(a) The systematic deactivation and essential abandonment of licensed
general acute care bed capacity accomplished through the elimination of
professional staff required for use of licensed beds and the implementation
of restrictive "gate keeping" and "early discharge" policies which have
the intent and effect of reducing acute hospital utilization. Data compiled
by the Office of Statewide Health Planning and Development shows that as
of the end of the second quarter, 1997, Kaiser’s plan to deactivate and
abandon use of licensed beds in its Contra Costa County facilities was
very successful, resulting in the effective deactivation of 46% of the
licensed acute care beds at the three Kaiser acute hospitals in Contra
Costa County. (See Exhibit 1 attached to this Complaint and incorporated
herein.) As of the end of the second quarter, 1997, Kaiser’s acute care
bed deactivation plan in Contra Costa County had these results:
Kaiser - Richmond
Licensed beds: 50
Staffed beds: 34
Percentage of licensed beds staffed: 68%
Percentage of licensed beds deactivated: 32%
Kaiser - Martinez
Licensed beds: 204
Staffed beds: 80
Percentage of licensed beds staffed: 39.2%
Percentage of licensed beds deactivated: 61.8%
Kaiser - Walnut Creek
Licensed beds: 388
Staffed beds: 233
Percentage of licensed beds staffed: 60.1%
Percentage of licensed beds deactivated: 39.9%
(b) A planned reduction of emergency health and critical care services.
Kaiser has steadily reduced emergency services available at its Richmond
and Martinez facilities as well as its Oakland Hospital which serves patients
of the Walnut Creek and Richmond facilities. Kaiser is implementing plans
to close all three of these facilities in their entirety. Data compiled
by the Office of Statewide Health Planning and Development show that during
calendar year 1996, Kaiser-Richmond had 38,060 visits to its emergency
room representing 18.9% of the total emergency room visits in Contra Costa
County and Kaiser-Martinez had 37,653 visits to its emergency room representing
12.2% of the Contra Costa County total. (See Exhibit 2 attached to this
Complaint and incorporated herein.) The closing of the Kaiser Richmond
and Kaiser Martinez facilities and elimination of emergency medical services
at those facilities will burden an already deficient Contra Costa County
emergency medical service capacity with more than 75,000 additional patients
per year. Kaiser’s elimination of emergency medical services throughout
the Northern California region and reduction of services in facilities
which remain open has resulted in increasingly longer, dangerous, and sometimes
fatal emergency room waits by patients. These dangerous conditions are
the direct, foreseeable and known consequences of Kaiser’s deactivation
of licensed critical care beds and other acute care beds achieved through
the elimination of necessary professional nursing staff. The following
examples from a comprehensive investigation and report of findings by the
Federal Health Care Financing Administration of the Department of Health
and Human Services illustrate the crisis created by Kaiser’s commercially-motivated
health care service reduction plan:
1. Patient 71 presented to the emergency department at
Martinez because his oncologist practices at the site; thus, the patient
had a reasonable expectation that the care he would receive would be individualized
to his particular needs, and be directed by, and in concert with, his personal
oncologist’s knowledge of his special needs. This patient was seen and
treated by the ED physician on duty. Interview with the patient’s oncologist
revealed that, although this physician stated his awareness of the availability
of well-developed protocols for the care and treatment of various manifestations
of Sickle Cell Anemias, and although said oncologist described his role
as key in developing these protocols in the East Bay community, no such
protocols were available or employed in the care delivered to this patient,
either in the ED or on the nursing care units. This patient endured a stay
of approximately 23 hours in the ED. He was told he could not be admitted
to the hospital in Martinez because there were no beds available. However,
review of the patients census and of the number of licensed beds available
at the facility at the time does not support the allegation of "no beds
available." (See Exhibit 3 attached to this Complaint incorporated herein,
excerpts of the 8/27/97 Statement of Deficiencies and Plan of Correction
issued by the Health Care Financing Administration of the Department of
Health and Human Services, pp. 83-84.)
2. Nine complaints have been made to the Department of
Health Services since April 1997 regarding long waits for treatment in
the ER of the Walnut Creek campus. Investigation of those complaints has
substantiated long waits for treatment, long waits for admission to the
hospital or transfer out to another hospital Statistical data has verified
an increase in ambulance traffic since March 1997 when the Martinez ER
went to stand-by status. There has not been a corresponding increase in
staffing, though. A comparison of January 1997 to May 1997 shows an increase
of 20% in ambulance arrivals. This translates to an increase in acuity
of patients coming to the emergency room with increased demands on existing
staff. (Exhibit 3, p. 102).
3. Those patients who leave without being seen has also
markedly increased. In 1996, patients who left the ER without being seen
averaged 3%. In April 1997, those who left without being seen was 7.5%
and in May, 6.8%. Five days were reviewed in May 1997. On 5/7, 11% left
without being seen, on 5/28, 12% left without being seen. For example,
patient 4 went to ER at 2:45 p.m. on 4/29/97 with severe abdominal cramps.
When she got disgusted and left at 7:35 p.m., she still had not seen a
physician. Many patients are told they may have to wait for several hours
before being treated.
Waiting times were reviewed for those being admitted to the hospital
and for those being transferred out. On 5/2, the average was a 7-hour wait
before being admitted. On 5/9, one patient waited 10 hours to be admitted
and one 13 hours. Of those being transferred out, the wait averaged 9 hours
on that day. On 5/28, the wait to be admitted averaged 7 hours. (Exhibit
3, p. 104).
4. Patient 170 is a 40 year-old man who presented to the Martinez ED
at approximately 12:04 p.m. on 9/1/97. He was diagnosed as having an "acute
anteroseptal myocardial infarction" (acute heart attack). His treatment
included treatment with TPA (clot-buster drug used in such cases) and admission
to critical care. Review of the critical care record reveals that this
patient was subsequently transferred, via critical care transport at approximately
2:20 a.m. on the morning of 9/5/97. His transfer was arranged, even though
there were fully equipped critical care beds which stood empty. (See Exhibit
4 attached to this Complaint and incorporated herein, excerpts of 10/28/97
Statement of Deficiencies and Plan of Correction of the Health Care Financing
Administration, p. 18).
# Patient 171 is a 77 year-old man who presented to the Martinez ED
on 8/31/97 at approximately 8:24 a.m., with complaints of feeling "weak
and leaning to the left since 2:00 a.m. today." He further complained of
chest pain with onset while in the ED, with "less discomfort" after he
was medicated with nitroglycerine (a drug used to dilate the blood vessels
in the heart muscle). His documented history includes coronary artery disease,
acute MI (heart attack) 6/92, history of diabetes and TIAs (transient ischemic
attacks), which are episodes of injury to brain tissue, which accounts
for about 80% of strokes. Although there were fully equipped critical care
beds standing empty, the patient was transferred to Mt. Diablo Medical
Center at approximately 12:35 p.m. The transfer record indicates "appropriate
care (was) unavailable" due to "no available beds." Review of patient census
for critical care for that date reveals the hospital failed to staff available
critical care beds, thus necessitating transfer of this elderly man. Diagnoses
at the time of transfer were: "chest pain, possible CVA" (cerebrovascular
accident: refers to stroke). (Exhibit 4, pp. 18-19)
# Patient 179 is a 74 year-old man who presented to the Martinez ED
on 9/12/97 at approximately 10:28 p.m. with complaints of dizziness, weakness,
spitting/coughing up blood for a week and history of ulcerative colitis
and bleeding ulcers. The ED physician assigned a diagnosis of "possible
pulmonary embolus" (a mass of undissolved matter or clot, in the pulmonary
artery or one of its branches). Treatment in the Martinez ED included the
intravenous administration of Heparin (an anti-coagulant, or drug that
inhibits clot formation and can increase the risk of bleeding or hemorrhage;
patients on anti-coagulant therapy should be handled as little as possible
to protect from injury. The hospital’s own internal "anti-coagulant standard"
states: "even small bumps or scratches may bleed excessively because of
anti-coagulant therapy."). Although there were fully equipped, empty beds
in the critical care unit, (CCU), no nursing staff was provided for this
patient at the Martinez CCU. Therefore, the patient was transferred to
the CCU at Mt. Diablo Medical Center at approximately 3:00 a.m. on 9/13/97.
(Exhibit 4, p. 19)
# Patient 183 is a 62 year-old woman who presented to the Martinez
ED on 8/31/97, with constant chest pressure/pain. She was diagnosed as
suffering an acute inferior wall myocardial infarction (heart attack).
Treatment in the ED included the administration of streptokinase (a thromboembolytic,
or clot-busting drug, which increases the risk of bleeding; unnecessary
handling should be avoided, and other protective measures such as padded
siderails should be employed to protect the patient). Although the record
indicated that the patient was admitted to the CCU . . . , review of the
PATIENT TRANSFER FORM reveals that the patient was, in fact, transferred
via CCT to a hospital in Vallejo. The transferring M.D. stated the reason
for the transfer was "no available beds." Review of the patient census
and staffing records reveals that there were unoccupied, fully equipped
beds in the critical care unit, but the hospital failed to provide the
necessary qualified nursing staff for patient care delivery in the critical
care unit. (Exhibit 4, p. 20)
# Patient 185 is a 33 year-old woman who presented to the Martinez
ED at approximately 9:21 p.m. on 9/1/97, complaining of headache, dizziness
and weakness in her hands; she stated that she was feeling the same as
when she had a previous stroke in 1995. She had a documented history of
CVA (stroke), hypertension (high blood pressure), and cardiomyopathy (disease
of the heart muscle). The patient underwent lab tests and a CT scan of
the brain. This scan revealed evidence of a stroke in the right side of
her brain. She was subsequently transferred (via CCT) to Mt. Diablo Medical
Center on 9/2/97 at approximately 1:30 a.m. The CCU at the Martinez site
had unoccupied, fully equipped beds available which were not staffed for
patient care. (Exhibit 4, p. 20)
(c) Kaiser’s response to the emergency care crisis its health care service
reduction plan has created has included a deceptive public relations campaign
to convince the public generally and Kaiser Health Plan members specifically
that restricted access to emergency care and long emergency room waits
are simply the norm and to lower their expectations of better access to
care. (Exhibit 5 attached to this Complaint and incorporated herein.)
(d) Kaiser has engaged in the systematic reduction of professional nursing
staff necessary to staff existing, fully equipped, licensed acute care
beds. Examples from the comprehensive findings of the Health Care Financing
Administration reflect the direct, foreseeable and known consequences of
Kaiser’s professional staff downsizing plan:
# Based on clinical record review, document review, staff interviews
and statements of patients/family, the hospital [Walnut Creek/Martinez]
failed to insure adequate numbers of registered nurses, licensed vocational
nurses and other personnel to provide nursing care to all patients as needed.
(Exhibit 3, p. 27)
# The emergency department logs (for March and May 1997) for the Martinez
and Walnut Creek campuses were randomly reviewed. Administrative nursing
staff and a staff position acknowledge that waiting times in both EDs were
increased by the failure of the hospital to provide nursing staff to care
for patients who required admissions. (Exhibit 3, p. 30)
# Confidential employee complaints targeted the labor and delivery
unit as being short-staffed for RNs. They stated that core staffing had
been increased by only one staff each shift after the move to their present
unit (March 1996). They said the number of stuff is inadequate because
the nurses are now responsible for recovering mothers and babies after
delivery and are responsible for post-anaesthesia recovery. These nurses
are also doing triage and advice calls. Because of the lack of L&D
nurses, many are mandated to work overtime. . . . . An interview with the
manager of the unit verified the lack of back-up nurse availability, increased
nurse call-ins and the necessity of overtime work for the existing staff.
. . . The staffing ratio is supposed to be one RN to two laboring patients.
Patients are to have one-to-one staffing when, (a) complete and pushing,
(b) during first hour after birth, (c) patient in labor with twins, (d)
patient receiving magnesium sulphate, (e) patient with complicated medical
disease, (f) patient with amnioinfusion or fetal distress, (g) patients
requiring increased emotional support. These confidential interviews revealed
that the above-stated staffing criteria is not met and poses a significant
potential danger to mothers and babies. Patients requiring one-to-one monitoring
are not getting it. (Exhibit 3, pp. 30-31)
1. Defendant Department
of Corporations was fully advised and aware of the investigations conducted
and comprehensive findings of deficiencies by the Health Care Financing
Administration in its August 27, 1997 and October 28, 1997 reports of deficiencies
at the Kaiser Walnut Creek and Martinez facilities as well as a similar
comprehensive report and statement of deficiencies issued on May 23, 1997
for the Kaiser Oakland and Richmond facilities. A "Public Survey Report"
issued by DOC on August 14, 1996 had made similar extensive findings of
significant deficiencies in the delivery of health care services by Kaiser.
The findings of consultants retained by DOC to conduct the survey included
the following:
1. The health Plan has failed to demonstrate that oversight
processes have been implemented to insure Plan accountability for the patient
care functions delegated to the medical centers. . . .
. . . . . . . . . . . . . .
3. The Department cannot find that the Plan is providing
coverage for emergency services as required by § 1345(b) [H &
S Code].
# The Plan has not demonstrated that processes have been effectively
implemented to insure that members receive medically-appropriate services
in accordance with § 1363.5.
# The department cannot find that the Plan provides reasonable access
to services in accordance with § 1367(e) and continuity of care in
accordance with § 1367(d).
. . . . . . . . . . . . . .
# The Plan fails to meet the Act’s requirements for an effective quality
assurance program in accordance with § 1370 and Rule 1300.70.
(See Exhibit 6 attached to this Complaint and incorporated herein, Department
of Corporations, Summary of Report of Medical Survey of Kaiser Foundation
Health Plan, Inc., Northern California Region, August 14, 1996, pp. 1-2)
In accordance with the requirements of the Knox-Keene Act, the August
14, 1996 Report stated: "[t]he Department will conduct a follow-up survey
after six months from the date of this Public Survey Report." (Exhibit
6, p. 1) The Survey Report identified several remedial actions to be taken
by Kaiser to correct serious systemic deficiencies in its delivery of health
care services. Despite DOC’s own August 14, 1996 findings of serious deficiencies,
its mandatory obligation and stated intent to conduct a follow-up survey
to determine compliance with specifically-identified remedial measures,
and its knowledge of the continuing and substantial deficiencies in the
delivery of health care services by Kaiser throughout the Northern California
Region as reflected in the Health Care Financing Administration investigations
and findings of deficiencies in May (Oakland/Richmond), August (Walnut
Creek/Martinez), and October 1997 (Walnut Creek/ Martinez), the DOC has
failed and refused and continues to fail and refuse to conduct its follow-up
survey, determine compliance or non-compliance with the August 1996 remedial
directives, or investigate and take remedial action regarding the significant
deficiencies disclosed in the Health Care Financing Administration investigations.
1. On March 12, 1997, plaintiff California Nurses Association
filed a complaint with defendant DOC regarding Kaiser’s plan for the systematic
withdrawal and elimination of emergency health care services and intensive
care services in Northern Alameda County and Western and Central Contra
Costa County. The CNA complaint alleged that Kaiser was engaged in "medical
redlining" of certain communities within its health care service plan areas
which presented a substantial risk of harm to these communities because
of an existing shortage of necessary emergency health and intensive care
services. The complaint warned that Kaiser’s medical redlining scheme presented
a clear and present danger to the public health because of the exposure
of Kaiser Health Plan enrollees and residents of the redlined communities
to increased risk of death and serious injury due to the lack of safe and
accessible emergency health and intensive care services. (See Exhibit 7
attached to this Complaint and incorporated herein, Complaint for License
Revocation/Suspension, Civil Penalties, and Cease and Desist Orders; Request
to Institute Action for Injunctive and Other Equitable Remedies, pp. 1-2)
The complaint requested an immediate hearing, the issuance of cease and
desist orders and DOC initiated civil action for injunctive relief. Defendant
DOC failed and refused and continues to fail and refuse to take any action
to investigate, conduct a hearing, present to Kaiser for response, or process
in any manner CNA’s March 1997 complaint. Defendant DOC has inexplicably
declined investigation and processing of this complaint despite confirmation
of the deficiencies alleged in that complaint and unfortunate subsequent
occurrence of serious health care risks warned of by CNA in the complaint
reported by the Health Care Financing Administration in its comprehensive
findings and statement of deficiencies issued on May 23, 1997. (See Exhibit
8 attached to this Complaint and incorporated herein, excerpts of Statement
of Deficiencies and Plan of Correction issued by the Health Care Financing
Administration).
2. On June 2, 1997, plaintiff CNA filed a second complaint
with defendant DOC regarding Kaiser’s plans to close the Oakland Hospital
Women’s Services Unit (Labor and Delivery, Obstetrics, Neo-natal Intensive
Care). (See Exhibit 9 attached to this Complaint and incorporated herein,
Request for Immediate Cease and Desist Orders and for Action for Injunctive
Relief to Prevent Serious Harm and Injuries to Patients). DOC refused to
investigate and to process the June 1997 complaint by CNA.
# On December 9, 1997, CNA again protested the elimination of maternity
care services at the Kaiser Oakland Hospital and partial transfer of services
to a non-Kaiser facility. (See Exhibit 10 attached to this Complaint and
incorporated herein). Defendant DOC did not investigate or take any action
on this complaint and instead approved the elimination of services at Oakland
Hospital.
# On or about January 20, 1998 Kaiser announced it would close all
of its Martinez Hospital in-patient services at 8:00 a.m. on January 26,
1998. Kaiser made this announcement notwithstanding the fact that its application
for approval by defendant DOC of the Martinez Hospital closing had not
been approved. Plaintiff CNA is informed and believes and alleges thereon
that at the time of this Complaint on January 26, 1998, defendant DOC had
not approved or taken action on Kaiser’s application to DOC for approval
of the closing of the Kaiser Martinez Hospital. Although Kaiser applied
for DOC approval for closing its Martinez Hospital and previously applied
and obtained such approval for eliminating maternity care services at its
Oakland Hospital, Kaiser representatives publically announced on January
24, 1997 that Kaiser would proceed with the Martinez Hospital closing without
DOC approval because Kaiser now believes that DOC has no authority to approve,
disapprove, or otherwise regulate its decision to close Martinez Hospital
and eliminate all acute care services provided at the Hospital.
# Defendant Department of Health Services ("DHS") has been on notice
and had actual knowledge of Kaiser’s commercially-motivated plan to reduce
critically needed health care services throughout the Northern California
Region including Contra Costa County by suspending use and permanently
deactivating licensed acute care beds through the planned, permanent reduction
of professional nursing staff and other staff necessary for use of the
licensed beds as intended, required and promised Health Plan members by
Kaiser. Defendant DHS had such awareness and knowledge as a result, inter
alia, of receiving patient complaints regarding the systematic reduction
of necessary staff and resulting de facto deactivation of licensed beds.
(See Exhibit 3, p. 102, ¶ 4 attached to this Complaint and incorporated
herein.) Plaintiff CNA is informed and believes and alleges thereon that
defendant DHS was aware and had knowledge of Kaiser’s plan for systematically
deactivating licensed acute beds and reduction of acute care services by
virtue of its participation in and receipt of the results of the Health
Care Financing Administration investigation and the reports of deficiencies
issued by the HCFA in May, August, and October 1997.
# Plaintiff CNA is informed and believes and alleges thereon, that
Kaiser failed and refused and continues to fail and refuse to apply for
DHS approval to decrease the licensed bed capacity it has undertaken in
its acute hospitals in Northern California and that defendant DHS has taken
absolutely no action to stop Kaiser’s calculated and phased elimination
of licensed beds and concomitant reduction in the availability of health
care services for Kaiser Health Plan participants.
# Defendant DOC and defendant DHS have tacitly approved and effectively
sanctioned Kaiser’s commercially motivated and dangerous plan to withdraw
and eliminate critically needed acute care and emergency health services
in the Northern California Region including Contra Costa County. Kaiser’s
plan seeks to profit by the elimination of costly services Kaiser committed
to provide to Health Plan members in consideration of fixed per member/per
month Health Plan premiums and resulting realization of a surplus of premium
revenue over costs. Kaiser’s commercially motivated plan has succeeded
in eliminating critically needed health care services from targeted communities,
reducing its costs, and generating large increases in surplus revenue.
Other direct providers of health care services in the Northern California
Region including Contra Costa County have followed Kaiser’s lead as the
dominant force in these health care markets in reducing and eliminating
"costly" acute care services in efforts to compete with Kaiser. Although
these direct care providers are not directly regulated by defendant DOC,
the acute care facilities they operate are licensed and regulated by defendant
DHS. Plaintiff CNA is informed and believes and alleges thereon that DHS
has similarly refused to investigate or undertake required corrective and
remedial actions regarding the unapproved deactivation of licensed acute
care beds by these other health care providers and has failed and refused
and continues to fail and refuse to undertake mandatory obligations to
investigate and correct these deficiencies. As a result, there has been
a significant pattern and practice of unlawful acute hospital deactivation
of licensed beds through permanent reductions in professional staff necessary
for operation of these beds, placing increasingly severe restrictions on
the availability of critically needed acute care services and emergency
services in Contra Costa County and throughout Northern California. As
of June 30, 1997, approximately 43% of the licensed acute care bed capacity
of Contra Costa County had been deactivated as a result of the planned
reduction of health care services by direct care providers. (See Exhibit
1).
IV. FIRST CAUSE OF ACTION
[Department of Corporations]
# Plaintiff realleges and incorporates by reference herein, the allegations
of ¶¶ 1-36 of this Complaint.
# Defendant Department of Corporations has failed and refused to perform
mandatory, ministerial duties imposed by the Knox-Keene Act with respect
to Kaiser’s systematic reduction in the availability of and access to safe
and adequate health care services for Kaiser Health Plan members by, inter
alia, the following acts and omissions:
(a) failing and refusing to investigate and initiate meaningful and
effective remedial action to correct serious, and substantial deficiencies
in the availability and accessibility of safe and adequate health care
services guaranteed to Kaiser Health Plan members (H & S Code §
1367(a));
(b) failing and refusing to investigate and take remedial action necessary
to correct serious deficiencies in the delivery of health care services
by Kaiser acute care facilities and operations as required by the license
obligations of these facilities. (H & S Code § 1367(a));
(c) failing and refusing to conduct a follow-up evaluation and assure
compliance with specific remedial directives issued in its Survey Report
of August 1996 and failing and refusing subsequent evaluation and appropriate
remedial action despite knowledge of Kaiser’s continuing failure of compliance
and continuing implementation of its plan to reduce the availability and
accessibility of critically needed acute care services for Kaiser Health
Plan members. (H & S Code §§ 1380(a), (g));
(d) DOC has failed and refused to perform mandatory duties to protect
Kaiser Health Plan members and insure the availability and accessibility
of safe and adequate health care services for these members by failing
to take action to stop the closing of Kaiser Martinez Hospital and by tacitly
approving this significant withdrawal of critically needed acute care and
emergency services through deliberate omission and inaction.
V. SECOND CAUSE OF ACTION
[Department of Health Services]
# Plaintiff realleges and incorporates herein by reference the allegations
of ¶¶ 1 through 38 of this Complaint.
# Defendant Department of Health Services has failed and refused to
perform mandatory, statutory duties to insure the provision of safe and
adequate acute care and emergency health services by Kaiser Hospitals licensed
by DHS by, inter alia, the following acts and omissions:
(a) Despite notice and actual knowledge of Kaiser’s systematic withdrawal
of acute care services to be provided under DHS license and permanent deactivation
of licensed acute care beds without obtaining DHS approval, DHS has failed
and refused to undertake investigation and initiate meaningful and effective
remedial action to correct Kaiser’s blatant violations of license and statutory
obligations DHS has a mandatory duty to enforce. (H & S Code §§
1271.1(a), 1279, 1294; 22 C.C.R. §§ 70101, 70105, 70131); and
(b) Despite notice and actual knowledge of Kaiser’s intended closure
and permanent reduction of licensed acute beds and emergency health services
without application for and DHS approval of such operational changes, DHS
has failed and refused to undertake investigation and meaningful and effective
corrective action to remedy Kaiser’s repudiation of statutory and license
obligations to maintain these services, including services provided at
Kaiser Martinez Hospital.
VI. THIRD CAUSE OF ACTION
[Kaiser Permanente Medical Care Program]
# Plaintiff realleges and incorporates by reference the allegations
in ¶¶ 1 through
40 of the Complaint.
# Plaintiff CNA, as representative of members of the general public,
and as representative of members of the community of Kaiser Health Plan
members, consumers and patients, and as representative of registered nurses
employed by Kaiser, has a right to assurance that Kaiser will act lawfully
and fairly in its business practices in the consolidated operations of
Kaiser Permanente Medical Care Program as a health care service plan and
direct provider of medical and health care services, pursuant to California
Business and Professions Code § 17200, et seq.
# At all times relevant to this Complaint, Kaiser, and its various
affiliated entities and integrated operations have engaged in immoral,
unethical, oppressive, unscrupulous and deceptive business practices, substantially
injurious to Kaiser Health Plan members, consumers and patients and residents
of communities in which Kaiser operates acute care facilities.
# Kaiser’s commercially motivated withdrawal and elimination of critically
needed acute care and emergency services has been accompanied by unscrupulous
and deceptive marketing and advertising promoting misleading and false
justifications and explanations for severe reductions in critically needed
health care services.
# Plaintiff CNA has repeatedly demanded that Kaiser cease and desist
implementation of its reckless and dangerous plan for withdrawing, eliminating,
and severely restricting acute and emergency health services. Kaiser has
refused, and still refuses to refrain from reducing the availability and
accessibility of safe and adequate health care services. Kaiser’s conduct
described herein constitutes unfair business practices, as defined in Bus.
& Prof. Code § 17200, et seq.
VII. IRREPARABLE HARM
[All Defendants]
# Plaintiff realleges and incorporates by reference herein, the allegations
in ¶¶ 1 through 45 of this Complaint.
# Kaiser’s commercially motivated withdrawal, elimination and restriction
of critically needed acute care and emergency health services and DOC’s
and DHS’s failure and refusal to undertake and perform mandatory duties
and obligations requiring meaningful investigation and effective remedial
actions to stop Kaiser’s dangerous plan, if continued, will cause irreparable
injury to plaintiff’s members as health care consumers and patients of
Kaiser and to members of the general public including 2.7 million Kaiser
Health Plan members in Northern California and others who reside in communities
in which Kaiser operates acute care facilities. Kaiser’s success in implementing
its reduction of care plan has already created a severe shortage of critically
needed staffed acute care beds and emergency health services because of
the acquiescence in this plan by DOC and DHS, threatening severe, permanent,
irreparable damage to the overall availability and quality of health care
in Contra Costa County and throughout Northern California.
# Because of Kaiser’s continuing and willful unlawful conduct and repudiation
of statutory and regulatory protections for Kaiser Health Plan members
and patients, and because of DOC’s and DHS’s continuing wilful disregard
of mandatory obligations to correct Kaiser’s reckless destruction of health
care standards and elimination of needed services, plaintiff is entitled
to preliminary and permanent injunctive relief restraining such conduct
in the future.
WHEREFORE plaintiff prays for judgment as follows:
1. For a declaration
that Kaiser’s withdrawal, elimination and reduction of acute care
and
emergency health services in the Northern California region is in violation
of the Knox-Keene Act and Kaiser’s statutory obligations as a licensed
direct care provider;
2. For a declaration
that DOC has mandatory obligations under the Knox-Keene Act
to immediately undertake investigation of pending complaints of plaintiff
CNA and ongoing deficiencies in Kaiser’s delivery of health care services,
hold hearings and take appropriate remedial action to correct these deficiencies,
including immediate action to stop the closure of acute care facilities
and emergency health operations and restoration of services Kaiser has
withdrawn, eliminated or restricted so as to make such services unavailable
and inaccessible to Kaiser Health Plan members;
3. For a declaration that DHS has mandatory obligations under the Health
& Safety Code to immediately undertake investigation of ongoing deficiencies
in Kaiser’s delivery of health care services, hold hearings and take appropriate
remedial action to correct these deficiencies, including immediate action
to stop the closure of acute care facilities and emergency health operations
and restoration of services Kaiser has withdrawn, eliminated or restricted
so as to make such services unavailable and inaccessible to Kaiser patients
and consumers;
4. For a preliminary injunction and permanent injunction, enjoining
Kaiser and all
its affiliated and related entities and operations, and their agents,
servants and employees, and all persons acting under, in concert with,
or for, or on behalf of them, as follows:
1. From closing any acute care facility or reducing any
acute care or
emergency health service currently provided
by Kaiser for a period of at least 12 months in order to permit a full
and adequate investigation, public hearings, and appropriate remedial action
by DOC and DHS;
B. From falsely representing to Kaiser
Health Plan members and the public
generally by affirmative acts, statements
or omissions, that Kaiser’s plans for withdrawing, eliminating, or reducing
acute care or emergency health services are lawful, beneficial, necessary
or appropriate, and requiring Kaiser to affirmatively publish, broadcast
and advertise in a manner, frequency, method of communication and level
comparable to Kaiser’s advertising and marketing of its health plans, and
as approved by plaintiff, public service marketing and advertising for
a period of one year to correct Kaiser’s misleading and deceptive marketing
and advertising and to educate Kaiser Health Plan members and health care
consumers generally regarding the causes of current shortages in the availability
and accessibility of acute care and emergency health services and Kaiser’s
plans to remedy a health care crisis created by Kaiser’s planned reduction
of these needed services;
3. Requiring Kaiser to immediately restore all acute care
and emergency
health services Kaiser has withdrawn, eliminated or reduced to the maximum
levels of services expressly provided in Kaiser health facility licenses
or necessarily required to adequately and safely provide for the maximum
level of services provided by such licenses; and to immediately develop
a plan for increasing acute care and emergency health services above the
maximum levels of service specified by Kaiser licenses to levels that are
appropriate and adequate in consideration of Kaiser’s significantly greater
and continuously increasing Health Plan membership.
1. For a preliminary
injunction and a permanent injunction compelling
DOC and DHS to perform mandatory obligations
to halt, correct and remedy Kaiser’s withdrawal, elimination and reduction
of needed acute care and emergency health services;
5. For costs of this action and award of reasonable attorney’s
fees based on the
common benefit conferred on 2.7 million
Kaiser Health Plan members and other non-member residents of communities
served by Kaiser facilities in Northern California; and
6. For such other relief as the Court deems just and proper.
DATED: January 26, 1998 EGGLESTON, SIEGEL & LeWITTER
JAMES E. EGGLESTON
_____________________________
Attorneys for Plaintiff
California Nurses Association
383-Xperemptwrit.plg
Home
|
