DMHC outlines oversight after Kaiser settlement; patients and union describe ongoing access and staffing failures

The California Department of Managed Health Care outlined a multi‑year enforcement timeline and the monitoring steps it is using to track Kaiser Permanente’s promised overhaul of behavioral health services during an informational hearing held May 6 by the Assembly Health Committee in Room 1100.

The department’s director said the October 2023 settlement with Kaiser included a $50 million administrative penalty and a requirement that Kaiser direct $150 million in investments over five years into behavioral‑health programs statewide, and that the plan paid $40 million on Oct. 19, 2023 with $10 million suspended pending completion of corrective actions.

The details matter: the corrective action work plan, the department said, is intended to make longer‑term changes to how Kaiser ensures timely access, referral and continuity of behavioral‑health care under the Knox‑Keene Act. The hearing brought DMHC officials, patients and clinicians to the same room to describe what has changed — and what has not.

DMHC overview and enforcement history

Mary Watanabe, director of the Department of Managed Health Care, told the committee the DMHC has pursued enforcement related to Kaiser’s behavioral‑health delivery since routine and nonroutine surveys first found deficiencies in 2012 and 2015. DMHC initiated a nonroutine survey in May 2022 and a strike‑focused investigation after a Northern California NUHW (National Union of Healthcare Workers) strike that year. The October 12, 2023 settlement resolved those actions, Watanabe said, and requires both the penalty and the multi‑year investment commitment.

"State law requires health plans to provide enrollees with medically necessary care within timely access and clinical standards at all times," Watanabe said. She described the department’s supervisory tools — routine medical surveys every three years, nonroutine focused surveys when patterns of complaints appear, help‑center complaint tracking, and behavioral health investigations authorized in the 2021 state budget.

Watanabe said the corrective action work plan Kaiser submitted initially (Feb. 1, 2024) lacked specificity, prompting iterative meetings and revisions that produced a final plan posted publicly in January and updated March 12, 2025, and that DMHC has begun quarterly oversight meetings (first held April 3, 2025). The department said it will post public quarterly reports and validate reported changes through follow‑up surveys and investigations.

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