Kaiser Permanente to pay $49M after 'undercover inspections' found medical waste, patient records in dumpsters

Kaiser Permanente has settled with the state of California for $49 million to resolve allegations that it was improperly disposing of hazardous medical waste—including body fluids—and thousands of patients' protected health information in dumpsters across multiple facilities.

Announced Friday by the California Attorney General’s Office, the settlement includes measures to correct the illegal disposal of landfill-bound trash. Kaiser Permanente confirmed the settlement and its cooperation with state and districts’ investigations in a separate statement released the same day.

“The illegal disposal of hazardous and medical waste puts the environment, workers and the public at risk,” California Attorney General Rob Bonta said in a release. “… 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.”

Bonta’s office said the settlement follows “undercover inspections” of 16 different facilities’ dumpsters conducted by various district attorneys’ offices.

They found “hundreds of items of hazardous and medical waste” including aerosols, cleansers, sanitizers, batteries, electronic wastes, syringes, medical tubing with body fluids and pharmaceuticals, the office said, as well as over 10,000 paper records containing the information of more than 7,700 patients. The findings prompted California’s Department of Justice to join and expand the investigation of the state’s largest healthcare provider.

During a Friday news conference, Bonta reportedly said investigators had also found “body parts” in the public waste stream. Kaiser pushed back on the claim in its statement.

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

Alongside $47.25 million in immediate payments, the large nonprofit will be on the hook for another $1.75 million if it does not spend at least $3.5 million over five years across its California facilities to ensure waste disposal compliance. Additionally, the organization must retain a law-enforcement-approved independent third-party auditor during the five-year period.

Kaiser said it “became aware of” the violations six years ago and that the disposal practices were “contrary to our rigorous policies and procedures.” The system said it “immediately” conducted an audit; established mandatory annual training across its staff and physicians; and introduced new equipment, instructions, receptacles and more “environmentally friendly products.”

“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,” the system said in its statement.

Kaiser has previously been hit with enforcement actions at the local level related to “mismanagement of regulated wastes,” Bonta’s office said.

The Oakland, California-based system is among the nation’s largest with 39 hospitals, 622 medical offices and 43 clinics in addition to its millions of covered health plan members. The nonprofit reported $95 billion in annual revenues across 2022 and a $3.3 billion gain as of the midyear point of 2023.