Anthem Blue Cross Visited With $95,000 in Penalties in January
Only one month into the new year, the California Department of Managed Health Care has already issued two enforcement actions against Blue Cross of California d.b.a. Anthem Blue Cross, penalizing the company $75,000 on January 14th and $20,000 on January 17th. The actions by the state regulator penalize Anthem for violating California law in many respects, including failing to provide reasons for denying claims and failing to maintain a complaint system as required by law. These January enforcement actions against Anthem are discussed below. If your insurance claim or request has been unreasonably denied or if you were otherwise mistreated by your insurance company, contact Gianelli & Morris to speak with a skilled and experienced California insurance bad faith lawyer.
Enforcement Matter 24-195
In a Letter of Agreement issued 1/14/25, the DMHC fined Anthem Blue Cross $75,000 for over half a dozen violations of the California Health and Safety Code and California Code of Regulations. The action stems from July 2022, when an Anthem policyholder was informed by her physician that she needed to see a specialist regarding her diagnosis of endometriosis. Using Anthem’s website, the policyholder found an in-network specialist who recommended a surgery be performed by a different provider, whose in-network status was also confirmed by the patient via Anthem’s website.
Although both providers requested pre-authorization for the procedure from Anthem, the plan denied those requests as being from noncontracted (out-of-network) providers, yet neither Anthem nor the doctors notified the patient about the denials. Unaware that pre-authorization was declined, the policyholder moved forward with the surgery in December, receiving both presurgical and post-surgical services from the doctors in addition to the operation itself.
The providers submitted their billings to Anthem, as did the hospital, labs, and other related providers. Anthem denied all claims as out-of-network, resulting in the patient being billed directly for the services, which totaled more than $250,000.
The enrollee filed an online appeal of the denials in February but did not receive a response from Anthem. She followed up with a phone call in April and was told by Anthem that they could not find her appeal and she should mail one in instead.
The policyholder next filed a grievance with Anthem, which was denied a month later in May. She then filed a complaint with DMHC in June. At first, Anthem only agreed to reprocess the claims submitted by the first provider, whom they agreed was listed on their website as in-network. Eventually, however, Anthem agreed to reprocess all claims.
The failures cited by DMHC which led to the administrative penalties include:
- Anthem failed to maintain an accurate provider directory
- Anthem improperly denied claims when the policyholder reasonably relied on information provided by Anthem
- Anthem failed to inform the policyholder in writing that they had denied the requests for pre-authorization
- Anthem failed to initiate a grievance when the enrollee contacted customer service with her concerns
- Anthem failed to adequately investigate and resolve all issues raised in the enrollee’s grievance
In addition to the $75,000 fine, DMHC required Anthem to provide training on handling reports of inaccurate provider listings.
Enforcement Matter 22-356
Just a few days later, on January 17th, DMHC concluded a separate investigation of Anthem Blue Cross that resulted in a $20,000 fine. In this case, the policyholder in question received emergency medical services from physicians who were out of network. According to plan documents as well as California law, claims for out-of-network services in an emergency should be treated the same as in-network claims, which in this case were a 20% co-pay. However, the policyholder wound up being charged $2,086.60 on a $2,587 bill.
The enrollee filed a grievance reminding Anthem that the services were provided in an emergency and requesting Anthem to reprocess the claim, yet the insurer nevertheless denied the grievance and refused to pay since the provider was out-of-network. After receiving a collections bill from the provider, the policyholder filed a complaint with DHMC, which promptly informed Anthem of its duties under California law.
Anthem subsequently revised its response to the claimant and sent an updated Explanation of Benefits (EOB) showing the enrollee’s responsibility to be $112.10 and not $2,086.60. That mistake cost Anthem a $20,000 administrative penalty for failing to adequately consider the enrollee’s grievance under California Health and Safety Code 1368.
Get Help With Bad Faith Insurance Denials in California From Gianelli & Morris
If your request for services or payment was unreasonably denied by Anthem or other health insurance companies operating in California, contact Gianelli & Morris for help from a team of attorneys dedicated to fighting for your rights.
