Attorney General Bonta announces $49 million settlement with Kaiser for claims of illegal disposal of hazardous waste, medical waste, and protected patient information | News

In partnership with six district attorneys, including the one from San Bernardino County, California Attorney General Rob Bonta on Sept. 8 announced a settlement with Kaiser Foundation Health Plan, Inc., and Kaiser Foundation Hospitals 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, Bonta said in a news release.

Kaiser has operated a hospital in Fontana for many decades.

“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 more than 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 and operates more than 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, Bonta was joined by the district attorneys of San Bernardino, Alameda, San Francisco, San Joaquin, San Mateo, and Yolo counties.

“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.”

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 five 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 more than 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, Bonta said.

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