Kaiser to Pay $49 Million to California for Illegally Dumping Private Medical Records, Hazardous Waste

Kaiser Permanente has agreed to pay $49 million as part of a settlement with California prosecutors who say the health care giant illegally disposed of thousands of private medical records, hazardous materials and medical waste, including blood and body parts, in dumpsters headed to local landfills, authorities said Friday

Prosecutors started an investigation in 2015 after undercover trash inspectors found pharmaceutical drugs, and syringes, vials, canisters and other medical devices filled with human blood and other bodily fluids, and body parts removed during surgery inside bins handled by municipal waste haulers. They also found batteries, electronic devices and other hazardous waste in trash cans and bins at 16 Kaiser medical facilities throughout the state, Attorney General Rob Bonta said.

“The items found pose a serious risk to anyone who might come into contact with them from health care providers and patients in the same room as the trash cans to custodians and sanitation workers who directly handle the waste to workers at the landfill,” Bonta said.

Kaiser is California’s largest health care provider and has more than 700 health care facilities that treat about 8.8 million patients in the state, Bonta said.

He said the undercover inspectors also found over 10,000 paper records containing the information of over 7,700 patients, which led to an investigation by prosecutors in San Francisco, Alameda, San Bernardino, San Joaquin, San Mateo, and Yolo counties. County officials later sought the intervention of this office, Bonta said.

“As a major health care provider Kaiser has a clear responsibility to know and follow specific laws when it comes to properly disposing of waste and safeguarding patient’s medical information. Their failure to do so is unacceptable, it cannot happen again,” Bonta said.

Kaiser Permanente, based in Oakland, California, said in a statement it takes the matter extremely seriously. It said it has taken full responsibility and is cooperating with the California Attorney General and county district attorneys to correct the way some of its facilities were disposing of hazardous and medical waste.

“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,” the company said. “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.”

Kaiser said it was not aware of any body part being found at any time during this investigation.

As part of the settlement, the health care provider must also retain for five years an independent third-party auditor approved by the Attorney General’s Office and the district attorneys involved in the complaint. The auditor will check Kaiser’s compliance with California’s laws related to the handling of hazardous and medical waste, and the protection of patients’ health information.

“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.”

In 2021, the federal government sued Kaiser Permanente, alleging the health care giant committed Medicare fraud and pressured doctors to list incorrect diagnoses on medical records in order to receive higher reimbursements.

The California Department of Justice sued the company in 2014 after it delayed notifying its employees about an unencrypted USB drive that contained the records of over 20,000 Kaiser workers. The USB drive was discovered at a Santa Cruz thrift store.