Kaiser responds

OAKLAND – In partnership with six district attorneys, California Attorney General Rob Bonta on Friday, Sept. 8, announced a settlement with Kaiser Foundation Health Plan, Inc., and Kaiser Foundation Hospitals (collectively “Kaiser”) resolving allegations that the healthcare provider unlawfully disposed of hazardous waste, medical waste, and protected health information at Kaiser facilities statewide. As part of the settlement, Kaiser will be liable for a total of $49 million and be required to take significant steps to prevent future unlawful disposals.

“The illegal disposal of hazardous and medical waste puts the environment, workers, and the public at risk. It also violates numerous federal and state laws,” said Bonta. “As a healthcare provider, Kaiser should know that it has specific legal obligations to properly dispose of medical waste and safeguard patients’ medical information. I am pleased that Kaiser has been cooperative with my office and the district attorneys’ offices, and that it took immediate action to address the alleged violations.”

The settlement is the result of undercover inspections conducted by the district attorneys’ offices of dumpsters from 16 different Kaiser facilities. During those inspections, the district attorneys’ offices reviewed the contents of unsecured dumpsters destined for disposal at publicly accessible landfills, finding hundreds of items of hazardous and medical waste (aerosols, cleansers, sanitizers, batteries, electronic wastes, syringes, medical tubing with body fluids, and pharmaceuticals) and over 10,000 paper records containing the information of over 7,700 patients. The California Department of Justice subsequently joined the district attorneys and expanded the investigation of Kaiser’s disposal practices further throughout the state. In response to this joint law enforcement investigation, Kaiser immediately hired a third-party consultant and conducted over 1,100 trash audits at its facilities in an effort to improve compliance. Kaiser also modified its operating procedures to improve its handling, storage, and disposal of waste.

Kaiser is headquartered in Oakland, California and operates over 700 facilities statewide, making it the largest healthcare provider in California. Kaiser provides healthcare to approximately 8.8 million Californians, as well as members of the public who seek emergency care from Kaiser facilities. In announcing the settlement, Attorney General Bonta was joined by the district attorneys of Alameda, San Bernardino, San Francisco, San Joaquin, San Mateo, and Yolo counties.

“As a major corporation in Alameda County, Kaiser Permanente has a special obligation to treat its communities with the same bedside manner as its patients,” said Alameda County District Attorney Pamela Price. “Dumping medical waste and private information are wrong, which they have acknowledged. This action will hold them accountable in such a way that we hope means it doesn’t happen again.”

“I am confident that this case shows the residents of San Bernardino County that our Office will not stand by as hospitals and other medical clinics dispose of medical waste including biohazards, hazardous waste and personal health information into our landfills, jeopardizing medical confidentiality,” said San Bernardino County District Attorney Jason Anderson. “Deputy District Attorney’s Stephanie Weissman and Supervising Deputy District Attorney Doug Poston dedicated years of their time and expertise to ensure the residents of our County are protected from the mishandling of medical waste and Kaiser policies are improved to safeguard the public moving forward.”

“My office takes patient privacy and the protection of the environment very seriously,” said San Francisco District Attorney Brooke Jenkins. “Hazardous waste, medical waste, and confidential patient information must be disposed of properly. When it is not, we will not hesitate to take action. Protecting patient privacy and the environment is just as important as protecting public safety.”

“This resolution further protects the health and safety of the residents of San Joaquin County and the state as a whole,” said San Joaquin County District Attorney Ron Freitas. “The unlawful disposal of hazardous medical waste has no place in this county, or any county, and the mishandling of confidential patient information will not be tolerated. The settlement with Kaiser places the appropriate safeguards to ensure that this never happens again.”

“As the largest healthcare provider in the state, Kaiser has an extraordinary responsibility to the public and to its own patients to ensure that hazardous waste, potentially infectious human waste materials, and highly sensitive patient health information are handled according to state laws and not sent to municipal landfills not equipped to handle those wastes,” said San Mateo County District Attorney Stephen M. Wagstaffe. “Our Environmental Unit continues to work with San Mateo County environmental regulators and colleagues across the state to investigate and prosecute entities that break the law and endanger the environment.”

As part of the settlement, Kaiser:

• Will pay $47.250 million. That amount includes $37,513,000 in civil penalties; $4,832,000 in attorneys’ fees and costs; and $4,905,000 for supplemental environmental projects, primarily environmental prosecutor training.
• Must pay an additional $1.75 million in civil penalties if, within 5 years of the entry of the final judgment, Kaiser has not spent $3.5 million at its California facilities to implement enhanced environmental compliance measures to ensure compliance with relevant provisions of the law that are alleged to have been violated.
• Must retain an independent third-party auditor — approved by the Attorney General’s Office and the district attorneys — who will: perform no less than 520 trash compactor audits at Kaiser’s California facilities to help ensure that regulated wastes (including items containing protected health information) are not unlawfully disposed of; and conduct at least 40 programmatic field audits each year, for a period of five years after entry of the final judgment, to evaluate Kaiser’s compliance with policies and procedures designed to ensure compliance with applicable laws related to hazardous waste, medical waste, and protected health information.

Kaiser’s unlawful disposals are alleged to violate California’s Hazardous Waste Control Law, Medical Waste Management Act, Confidentiality of Medical Information Act, Customer Records Law, and Unfair Competition Law. The disposals are also alleged to violate the federal Health Insurance Portability and Accountability Act of 1996, known as HIPAA.

In 2014, the California Department of Justice filed a lawsuit against Kaiser after it delayed notifying its employees about an unencrypted USB drive that was discovered at a Santa Cruz thrift store. The USB drive contained over 20,000 employee records. Kaiser paid $150,000 in penalties and attorneys’ fees, and agreed to comply with California’s data breach notification law in the future, provide notification of any future breach on a rolling basis, and implement additional training regarding the sensitive nature of employee records. In addition, Kaiser has been the subject of prior enforcement actions by local prosecutors for mismanagement of regulated wastes.

A copy of the complaint and proposed stipulated judgment, which details the aforementioned settlement terms and remains subject to court approval, can be found here and here.

Kaiser Issues Statement in Response

Kaiser responded with the following statement:

“Kaiser Permanente is committed to the health and well-being of our members, patients, employees, physicians, and the communities we serve, which includes proper waste disposal and protecting the confidentiality of member and patient information. Millions of people receive care and support in our hundreds of medical facilities across California each year and we have well-established policies and procedures for disposing of the different kinds of resulting waste items.

About six years ago we became aware of occasions when, contrary to our rigorous policies and procedures, some facilities’ landfill-bound dumpsters included items that should have been disposed of differently. Upon learning of this issue, we immediately completed an extensive auditing effort of the waste stream at our facilities and established mandatory and ongoing training to address the findings. All Kaiser Permanente staff and physicians in California take this required annual training. We also introduced specialized equipment, instructions, and receptacles placed closest to where waste is generated to ensure all types of waste are disposed of properly, and we introduced more environmentally friendly products to enhance our long-standing environmental compliance measures.

We take this matter extremely seriously and have taken full responsibility to acknowledge and, in cooperation with the California Attorney General and county district attorneys, correct our performance regarding landfill-bound trash where it may have fallen short of our standards. We dedicated many hours to identifying and closing gaps to strengthen our regulated waste disposal program and are confident in our ability not only to meet the monitoring and reporting requirements of this settlement, but to comply with the numerous requirements that apply to the different kinds of waste that result from caring for millions of Californians.

In order to address this issue, Kaiser Permanente developed a three-step approach that includes:

1. Assessment of hospitals, medical office buildings, and other facilities to identify the types of waste generated and to provide the right receptacles so that it is as easy and convenient as possible for our staff and physicians to dispose of waste in the appropriate receptacles;
2. Worksite rounding to observe disposal techniques and to provide just-in-time training to ensure compliance with proper practices; and
3. Training, which every employee and physician in California is required to participate in annually, on proper waste disposal processes.

We are not aware of body parts being found at any time during this investigation. There were isolated examples of what appeared to be small amounts of tissue debris.”