Anthem Blue Cross Hit With $162,000 in Penalties for Grievance Violations in August
For years now, insurance companies like Blue Cross of California d.b.a. Anthem Blue Cross have been made aware of the requirements under California to maintain a policy and procedure to receive and process customer complaints (grievances) and to respond to complaints and resolve them within the time frame specified in the law. Nevertheless, companies like Anthem continue to violate this simple requirement in numerous ways, and time and again the state regulator is forced to assess thousands of dollars in penalties.
This same old song and dance has been going on for years and shows no sign of slowing. Just last month, the Department of Managed Health Care (DMHC) Office of Enforcement issued six different Enforcement Actions against Anthem for grievance-related violations, amounting to a total of $162,000. One would hope these continuous hits to Anthem’s pocketbook would produce a change of behavior, but so far we haven’t seen much of an improvement.
Here is a look at the Enforcement Actions issued against Anthem in August for violations of California law related to health plan grievances. If your health insurance claim has been unreasonably delayed or denied even after trying to resolve it through your health plan’s grievance or complaint process, contact Gianelli & Morris to review your claim with a team of skilled and experienced California insurance bad faith attorneys.
Six Enforcement Actions Against Anthem Covering 21 Violations of California Law
This past August, DMHC brought six separate enforcement actions against Anthem which included 21 violations among them related to grievances. The grievances concerned a wide range of medical services, including the out-of-pocket maximum and office visit co-pay for mental health services, an out-of-network chiropractic coinsurance benefit, laboratory services deductible, medically necessary surgical treatment, and coverage for outpatient hospital services. In the Letters of Agreement resolving the matters, the agency assessed $162,000 in penalties against Anthem, ranging from $20,000 to $45,000 and averaging $27,000 per enforcement action. Anthem’s failures included the following:
Failure to adequately consider an enrollee’s grievance. California Code of Regulations (CCR) 28 1300.68(a)(1) says that health plans must have a grievance system that properly identifies and adequately considers grievances and rectifies them where appropriate. In one example, the enrollee submitted a grievance related to the denial and exclusion of her claim. Anthem responded by upholding the denial and stating all claims were processed correctly. Yet Anthem’s denial failed to evaluate and address the actual claim in dispute. Only after the Department got involved did Anthem flag the claim for further review and eventually acknowledge they denied the claim in error.
Failure to provide an accurate and clear written explanation of the specific reasons for denying, adjusting, or contesting a claim, within the timeframes specified in law. CCR 1300.71(d)(1) mandates that a health plan “shall not improperly deny, adjust, or contest a claim. For each claim that is either denied, adjusted or contested, the plan… shall provide an accurate and clear written explanation of the specific reasons for the action taken within the” specified timeframes. Anthem failed to follow the law on multiple occasions in August.
Failure to establish and maintain a department-approved enrollee grievance system. Section 1368(a)(1) of the California Health & Safety Code requires that “every plan shall establish and maintain an approved grievance system under which enrollees may submit their grievances to the plan. Each system shall provide reasonable procedures… that shall ensure adequate consideration of enrollee grievances and rectification when appropriate.” Without an adequate system in place, policyholders have no effective way to fight a claim denial or other mistreatment, other than contacting a lawyer and potentially filing a lawsuit.
Failure to resolve the grievance within 30 days. Section 1368.01(a) of the California Health and Safety Code requires health insurers to have a grievance system in place that resolves grievances and communicates its decision to the policyholder within 30 days, or 72 hours if the matter is urgent. In one of the Enforcement Actions issued last month, Anthem received a complaint on November 11, 2020, but the grievance was not routed to the company’s grievances department until four months later on March 15, 2001. Even worse, Anthem failed to take any further action toward resolving the grievance until it issued a denial (which was found to be improper) on June 6, 2021, a full six months after receiving the grievance. Anthem did eventually contact the provider to request reimbursement for the enrollee, but payment has not been confirmed, and as of March 26, 2024, over three years after receiving the grievance, Anthem acknowledges the complaint has still not been fully resolved. DMHC decided a $45,000 administrative penalty was warranted.
Contact Gianelli & Morris for Improper Insurance Claim Denials in California
The penalties described above were not the only Enforcement Actions visited upon Anthem in August, by the way. The insurance company was also penalized $450,000 for 15 other violations related to Improper Cancellation or Rescission of Coverage. If your insurance claim was unreasonably or wrongly denied by the insurance company, you might have a claim for insurance bad faith which would allow you to recover insurance benefits, compensation for harm you suffered, and punitive damages. In California, call Gianelli & Morris at 213-489-1600 or contact us online for a free consultation to discuss your claim and find out how we can help.
