By Harriet Blair Rowan December
4, 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,” said spokesman Michael Bowman via
email.
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 KHN story first published on California
Healthline, a service of the California Health Care Foundation.
Harriet
Blair Rowan: hrowan@kff.org,
@HattieRowan
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