By Harriet Blair RowanKaiser Health News Nov. 27, 2019
One of
California’s largest health insurance plans has distinguished itself, and not
in a good way.
The state
Department of Managed Health Care hit Anthem Blue Cross with $9.6 million in
fines from January 2014 through early November 2019, according to a California
Healthline analysis of agency data. That is about 44% of the $21.7 million in
penalties the department issued
against full-service health plans during that period.
And yet, Anthem
covered only 10% to 13% of Californians with department-regulated plans. An
annual average of 3.8 million Californians were enrolled in the plan over the
period analyzed.
By comparison,
Kaiser Permanente covered nearly one-third of Californians in
department-regulated plans in that time frame, but received 11% of the
penalties. (Kaiser Health News, which produces California Healthline, is not
affiliated with Kaiser Permanente.)
“One reason Blue Cross has more actions is due
to the plan’s historical failures to properly identify and handle enrollee
grievances and appeals,” department spokeswoman Rachel Arrezola said via email.
Anthem said it
takes all enrollee grievances seriously. “Anthem has been making significant
changes in its grievance and appeals process, as well as investments in system
improvements to help ensure we are simplifying the healthcare experience for
consumers,” spokesman Michael Bowman said.
The fines
against Anthem are related to many of the 553 enforcement actions that the
department has taken against the health plan for violations such as taking too
long to respond to enrollee grievances, inappropriately denying claims and not
covering the cost of out-of-network care that should have been covered.
The sanctions
against Anthem make up more than one-third of the 1,432 enforcement actions the
department issued. They can include settlement agreements requiring plans to
change bad practices, cease-and-desist orders, judicial rulings and civil
complaints.
“The primary
purpose of an enforcement action is to change the health plan’s behavior to
comply with the law,” Arrezola said.
The dates of the
enforcement actions don’t always coincide with when the violations occurred.
The department can take years to process some enforcement actions and also
processes some in batches, making year-over-year comparisons misleading.
In 2017, the
department issued a $5-million fine to Anthem for
repeatedly failing to resolve consumer grievances in a timely manner. But after
lengthy negotiations, the department and the health plan settled in June on a $2.8-million
fine along with an agreement that Anthem would invest $8.4 million to make
improvements.
The Department
of Managed Health Care, which oversees health plans that cover about 26 million
Californians, is the state’s largest health insurance regulator. Since 2000,
when the agency was created, it has levied $73 million in fines to licensed
health plans.
Anthony Wright,
executive director of the advocacy group Health Access California, said fines
are an important way to protect consumers, but he has advocated for even larger
penalties.
“We don’t want
these transgressions to be the cost of doing business when [insurers] have not
met the standards and consumer protections that we expect of them,” he said.
Wright said it’s
important for consumers to check health-plan enforcement records before they
enroll, which can be accessed through the department’s website.
But Wright acknowledged
that many people don’t have a choice, making the department’s oversight role
even more important.
“The most
important thing is the fines and the corrective actions,” Wright said, “to make
sure these practices end.”
This story was
written for Kaiser Health News, an editorially
independent publication of the Kaiser Family Foundation.
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