WA fines Kaiser $300K for mental health insurance violations

Washington's insurance commissioner has fined Kaiser Permanente $300,000, for the company's failure to provide proof that they were complying with state and national requirements for mental health insurance coverage.

It's the latest in a string of big insurance companies to be fined in Washington for not following mental health parity" laws — a set of state and federal rules that require insurers to cover mental health at a similar rate to physical conditions. For example, if a provider covers unlimited doctor visits for chronic physical conditions like diabetes or cancer, it must do the same for chronic mental health conditions such as schizophrenia or depression.

The office of the insurance commissioner, which regulates insurance providers in Washington, said in a filing Wednesday that during evaluations of its services in 2019 and 2020, Kaiser did not show clear standards for how it was determining how it would reimburse mental health providers for services. It also said the company showed it took longer to provide mental health services compared to medical and surgical services.

"I've seen a trend among our state's largest insurers of mental health parity issues," said Insurance Commissioner Patty Kuderer in a statement Thursday. "The market scans that started our work on these violations was an important step and I'm glad to see these issues corrected so Washingtonians have the access they deserve to these important services."

Kaiser had made some improvements, so the state agency suspended $100,000 of the fine. If Kaiser doesn't continue to meet the rest of the conditions of the order, it will have to pay the rest of the fine, said Stephanie Marquis, a spokesperson for the commissioner's office.

Linnae Riesen, a spokesperson for Kaiser Permanente, said the insurance company took immediate action to address disparities in its mental health services after the state's evaluation in 2020.

"Over the past several years, we've significantly reduced wait times by increasing the number of therapists and nurse practitioners, and we've integrated treatment for depression and anxiety into the primary care setting at 25 of our clinics," Riesen said in an email. She said the company has also expanded its external provider network by more than 50%, and increased reimbursement rates for providers.

The fines stemmed from a series of studies the insurance commissioner's office has conducted over the past few years to see if companies are following mental health parity laws.

As a result of these analyses, four of Washington's five largest insurers have now been fined for violating mental health rules in the last three years.

Kuderer fined Premera Blue Cross Washington $500,000 in August, and Regence $550,000 in November for similar breaches. And in 2023, the office of the insurance commissioner fined United Healthcare $500,000 for failing to prove its operations were in line with mental health insurance laws.

Federal laws requiring mental health parity were passed in 2008, but were not always consistently enforced and studies show that insurers frequently disregarded the rules. A report in 2024 found that patients were 10.6 times more likely to go out-of-network for psychological care compared to specialty medical care — a sign that mental health care wasn't abundantly available in network.

In 2024, Congress passed legislation to require companies to report how they were following parity rules.

The Trump administration last year said it may rescind those more recently passed enforcement rules. And while Washington has its own state mental health parity laws that will protect some insurance customers, they don't extend to everyone. Those on Medicaid, the federally funded health insurance plan for low-income Americans, as well as those on "self-funded plans, where employers provide health benefits directly to employees, are still at the mercy of federal enforcement.

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