Harris-Muller : Kaiser Abusing Non Profit Status
Harris-Muller claims she had told Kaiser since 2007 that it was “not maintaining an appropriate threshold of revenue to meet its 501(c)(3) obligations of providing benefits to the community.” When Kaiser’s Mid-Atlantic region spent just 2.5 percent of its revenue on community benefits in 2010, Harris-Muller says, the paltry number “was actually an increase over the community benefits provided in prior years.”
Even before her promotion to CAO, Harris-Muller says, she expressed concerns about the companies’ tax-exempt status, saying that “these entities needed to focus on providing benefits to the communities and patients, instead of focusing so heavily on using the billions of dollars in benefits from its tax-exempt status to fuel its market expansion/dominance and increase profits.
“In 2008, plaintiff reported to Kaiser that it was spending funds in an unjustified manner, including the Kaiser Permanente’s Platinum Circle event in Hawaii.”
Citing company literature, she says that event featured “complimentary airfare and accommodations for two at a luxury Fairmont resort, where you’ll mingle with senior Kaiser Permanents executives and your counterparts from around the country. There will be plenty of time for snorkeling, golf, a spa treatment, or just relaxing.”
Harris-Muller says that from 2007 until she was fired, she “reported to Kaiser that it was not maintaining an appropriate threshold of revenue to meet its 501(c)(3) obligations of providing benefits to the community. This was a major and growing concern for Kaiser. For example, in 2010, plaintiff reported to her superiors that Kaiser’s Mid-Atlantic region only used 2.5 percent of its revenues to provide community benefits, which was actually an increase over the community benefits provided in prior years. …
“Moreover, Kaiser’s Mid-Atlantic was not providing any care to indigents or uninsured people - it only provides care to Kaiser members and is not a Medicaid participating health plan. By comparison, an IRS study of 544 nonprofit hospitals provided that ‘the average and median percentages of total revenues reported as spent on aggregate community benefit expenditures were 9 percent and 6 percent, respectively, for the overall group.’”