An administrative law judge has sided with Kaiser Permanente in the latest skirmish in the battle between one of the nation's largest HMOs and the California Department of Managed Health Care (DMHC) to determine whether the DMHC has the authority to fine Kaiser for failing to provide one of its patients with access to medical care.

According to the judge, the DMHC overstepped its authority in May 2000 when it levied a $1.1 million fine against Kaiser, accusing the HMO of "systemic problems" that resulted in the January 1996 death of Margaret Utterback of San Leandro, Calif.

The DMHC alleges that although Utterback arrived for an appointment two hours early, Kaiser forced her to wait until her scheduled time, while she was visibly in pain, before seeing a doctor. Utterback suffered a ruptured aneurysm only minutes after arriving at the Kaiser Hayward Hospital emergency room, and died a day and a half later in the hospital's critical care unit.

Kaiser appealed the fine, insisting that physicians are overseen by the state Medical Board, which determined that Utterback's care was appropriate. According to Kaiser, the DMHC's fine was levied based on the medical circumstances of the case — a basis outside the jurisdiction of the California regulators.

The DMHC disagrees. Although it says Utterback received medically appropriate care once she actually saw a doctor, it fined Kaiser because the HMO initially denied her emergency access to that care.

Round 3

It now looks like the matter is headed for Round 3. The judge, who ruled that the DMHC's authority is limited to the financial regulation of health plans, reduced the fine to $25,000. However, DMHC Director Daniel Zingale has rejected the ruling and says he will appoint an independent hearing officer to determine if the department can order an HMO to provide better access to patient care.

In the meantime, the DMHC says the $1.1 million fine against Kaiser still stands.