Whistleblower lawsuit against Kaiser (updated)

At a time when concerns about the privacy and security of electronic health records are a hot topic and the issue of private vs. public health insurance is making the front pages, a lawsuit filed by a former Kaiser employee alleges that Kaiser knowingly and repeatedly violated HIPAA, exposed millions of members to identity theft, and ripped members off by not keeping track of deductibles and co-payments.

A whistleblower lawsuit filed by a former employee against Kaiser in Los Angeles County Superior Court names Kaiser Foundation Health Plan (KFHP), KP Program Group, and Robb Munson, Vice-President of Health Plan Service and Administration for KFHP as defendants. The plaintiff is John Denning, a former Senior Enterprise Architect and Director of Claims for Northern California.

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Allegations of HIPAA Violations

Denning’s complaint also alleges two patient privacy breaches that have never been reported in the media:

1. Denning claims that in November 2007, he discovered a security breach involving all Kaiser members in Northern California diagnosed with dementia. According to the complaint, Kaiser’s Dementia Registry had been placed on a “widely accessible public share drive” on Kaiser’s network. Denning claims that he reported the problem to the KPIT help desk, but the problem continued, and he then reported the problem to the KPIT Compliance Officer. According to the complaint:

That officer told Plaintiff that Kaiser leadership did not care and that there was widespread violations of HIPAA throughout the Kaiser network and throughout the organization. He told Plaintiff that the only way he could get the company’s attention would be to send the information anonymously on a disk to George Halverson, Kaiser Foundation Health Plan’s then CEO, at his home with a note telling him that unless this was corrected by a certain date, the next time he would see the information would be in the New York Times.

Denning claims that he did not do that, but instead, reported the breach to the National Compliance Hotline. Again, he reported getting no response.

2. Denning also claims that sometime around April 2008, Kaiser employees in his building

were regularly dumping thousands of unshredded patient health information (“PHI”) paper records that they had printed that included patient names, other identifying records including their social security numbers, banking information, diagnoses, prescriptions, and other sensitive sensitive information into public trash bins which were unlocked, unmanaged, and totally exposed to public scrutiny.

Denning claims that he reported the situation to the Compliance Officer for his department and followed up repeatedly.

Months later, Kaiser management claimed to have done an “investigation” of Plaintiff’s report and denied that any HIPAA violations had been or were taking place, despite the fact that Plaintiff and at least five other Kaiser employees confirmed that they had witnessed the on-going illegal dumping of patient records.

According to the complaint, he reported the alleged HIPAA violations to the U.S. Department of Health and Human Services (“HHS”) on at least three occasions…