Anthem Fined $450,000 for Blanket Exclusion of Sex Reassignment Surgery
Health insurance is for everyone, and California law makes it clear that insurance companies are not allowed to impose exclusions, charge differentials, or other modifications of enrollee benefits based on race, color, national origin, ancestry, religion, sex, gender, marital status, sexual orientation, or age. One exception is that premiums, prices and charge differentials based on age are not prohibited when the decision is based on objective, valid, and up-to-date statistical and actuarial data.
In our experience, insurers like Anthem have a history of issuing blanket denials regarding certain procedures without making an individual determination whether the procedure is medically necessary for a particular individual. We have seen this happen regarding specific procedures such as the use of a particular device to treat lumbar spinal stenosis or a specific form of radiation therapy to treat certain kinds of cancer.
Another area ripe for blanket denials is requests for reconstructive surgery, which insurers routinely misclassify as “cosmetic” rather than “reconstructive.” California law does not require plans to cover cosmetic surgery, but they must cover reconstructive surgery, which by definition includes surgery “to create a normal appearance, to the extent possible.”
When an insurer has a blanket policy of denying sex reassignment surgery and related treatments, not only does it violate the law requiring insurance companies to consider each request for treatment or services on an individual basis, but it also unlawfully discriminants against policyholders on the basis of sex, gender, or sexual orientation. Read on to learn how such an exclusion recently cost Anthem Blue Cross $450,000. If your insurance claim or request for services has been unreasonably denied by your insurer, contact Gianelli & Morris to discuss your situation with a leading California insurance bad faith lawyer.
California State Regulator Reminds Insurance Companies Not to Discriminate Based on Gender Identity or Expression
On April 9, 2013, the California Department of Managed Health Care (DMHC) issued All-Plan Letter 12-K, reminding insurers of their obligations against discrimination under the Insurance Gender Nondiscrimination Act (IGNA), which is codified in the California Health and Safety Code section 1365.5. The 12-K Letter instructed health plans to revise their documents to remove all benefit and coverage exclusions and limitations based on an individual’s gender, gender identity, or gender expression. The letter further reminded insurers that a medical necessity review of a request for authorization could not include limitations based on an enrollee’s gender, gender expression or gender identity.
Another letter was issued in 2015 which again directed Insurance companies to comply with IGNA and also omit lists of surgeries that are universally excluded from coverage or examples of non-covered surgeries as reconstructive or cosmetic.
Nevertheless, Anthem revised its Clinical Guideline on Sex Reassignment Surgery (CG-SURG-27) in 2016 to include a list of 21 surgeries or procedures which were “considered cosmetic when used to improve the gender specific appearance of an individual who has undergone, or is planning to undergo sex reassignment surgery.” No alternate criteria were present to determine if the requested surgery was reconstructive or medically necessary; instead, the policy only provided a blanket exclusion just like Gianelli & Morris has fought against many times in many different medical settings.
Anthem eventually complied with the DMHC letter by removing categorical limitations from its Evidence of Coverage (EOCs) but still maintained the same limitations by incorporating them into CG-SURG-27. Anthem then relied on that guideline to consistently deny facial feminization, laser hair removal/electrolysis, breast augmentation, voice modification surgery, voice therapy and various other services as cosmetic. It did this with no consideration of any individual clinical information before issuing a denial; instead, Anthem relied on its Clinical Guideline to issue blanket denials of these services.
DMHC decided that Anthem’s actions violated California Health & Safety Code 1365.5 and “deprived these enrollees of an appropriate medical necessity evaluation, resulting in one size fits all denials.” In a series of Enforcement Actions, the state insurance regulator accused Anthem of “applying exclusions to enrollees diagnosed with gender dysphoria by excluding services from coverage when used to improve the gender specific appearance of enrollees who had undergone or were planning to undergo gender reassignment surgery. These limitations only applied to transgender enrollees and created confusion for the reviewers regarding the medical necessity of the 21 procedures.”
Corrective Actions
Last month, the DMHC Office of Enforcement issued a Corrective Action against Anthem for 15 related violations. Enforcement included requiring Anthem to submit to a Corrective Action Plan with multiple components. In addition, Anthem was assessed a $450,000 administrative penalty for its misdeeds.
Anthem stopped using CG-SURG-27 and has been applying criteria consistent with transgender standards of care for requests for services related to gender dysphoria. The insurer now has a dedicated case manager and backup case manager specially trained to handle requests for services related to gender dysphoria. The company also says it is working on an Inclusive Care Program for all LGBTQIA+ members.
Meanwhile, DMHC asked Anthem to provide an accounting of all enrollees with a diagnosis of gender dysphoria who requested services during the specified period of July 2018 through December 2020 and to determine if those enrollees had been provided with the service requested. Anthem must also review three current enrollees identified by DMHC who had requested services but may have not received them. DMHC proposed that the new Case Managers reach out to these individuals and ensure they get covered care consistent with the law.
Contact Gianelli & Morris to Fight Unlawful and Bad Faith Insurance Claim Denials in California
If your insurance company has unreasonably denied your insurance claim by issuing a blanket denial of services without evaluating your case, or if they have engaged in bad faith conduct or otherwise violated California law, call Gianelli & Morris at 213-489-1600 or contact us online for a free consultation to evaluate your case and let you know how we can help.
