Anthem Fined $30,000 for Failing to Provide DMHC With Information Used to Resolve Grievances

Not only does Anthem consistently fail to respond to customer complaints in a timely manner if at all, they don’t even respond well to requests from the California state insurance regulator. The regulator, the Department of Managed Health Care (DMHC), has the authority to assess administrative penalties, but it seems even slapping the company with a $10,000 fine every time it screws up is doing little to reform their behavior. Read on about a few recent Anthem failures below, and contact Gianelli & Morris to speak with an experienced and successful California insurance bad faith lawyer if Anthem or another insurance company is mishandling your claim in violation of California law.

What Is a Grievance?

A Grievance is defined in California insurance law as “a written or oral expression of dissatisfaction regarding the plan and/or provider, including quality of care concerns, including a complaint, dispute, request for reconsideration, or appeal made by an enrollee or the enrollee’s representative. Where the plan is unable to distinguish between a grievance and an inquiry, it shall be considered a grievance.” The insurer is supposed to know how to identify a complaint from a policyholder as a grievance and treat it as such.

California law requires managed health care plans (HMOs and plans that service Medi-Cal recipients such as Anthem, Health Net, Molina, Blue Shield Promise and others) to maintain a system for enrollees to file a grievance. This system must provide reasonable procedures that ensure adequate consideration of a grievance and resolution when appropriate.

In most instances, the insurance company must send a written acknowledgment to the policyholder within five calendar days that a grievance was received. This acknowledgment should include the name, address and phone number of a contact person at the company to communicate with regarding the grievance.

Once received, insurers must resolve a standard grievance within 30 days. In the case of an expedited grievance to address an urgent concern, the insurance company has three days to provide a written statement on the disposition or pending status of the grievance.

The company must provide a written response to the grievance with a clear and concise explanation of the reasons behind the plan’s response. If the company stands by its delay or denial of a claim, it must provide the criteria and clinical reasons for the delay or denial. If the response is that the claim is excluded from coverage, the insurer must point to the specific policy provision that excludes the claim from coverage. This information is critical for the policyholder to understand the decision and decide whether to accept the response or take further action.

Failure to Provide the Department the Enrollee’s Grievance Filed With the Plan as Required by California Law

In December 2023, DMHC entered into a Letter of Agreement with Blue Cross of California, DBA Anthem Blue Cross, regarding three Enforcement Matters numbered 21-345, 21-349, and 21-602. The three matters were brought together in one agreement because they all concerned the exact same failure on the part of Anthem in three separate situations, once in January 2021, again in February, and once more in May.

If policyholders can’t get their grievances resolved with the insurance company, they may turn to DMHC for help. At that point, DMHC typically sends a standard Request for Health Plan Information (RHPI) to the insurance company so it can assess the situation. Part of that standard RHPI would be for the insurance company to send over a copy of the grievance, along with a copy of its grievance system and other relevant documentation.

In the three enforcement matters referenced above, Anthem responded to the RHPI indicating it did receive the enrollee’s grievance, but Anthem did not provide the grievance to the department. Anthem did this on three separate occasions in rapid succession.

California law requires an insurance company to provide the DMHC with any information used by the insurer in resolving a grievance. It must provide additional information in its possession within five days of the request. A copy of the grievance is specifically requested in the RHPI. The grievance itself is a critical piece of documentation the DMHC must receive; without it, the Department can’t determine if the plan adequately considered the grievance before DMHC involvement.

DMHC assessed a $10,000 administrative penalty against Anthem for each violation for a total of $30,000, and Anthem agreed to the penalties. This was in December 2023. By March of 2024, Anthem had racked up another nearly $150,000 in penalties for grievance-related violations, including failing to establish and maintain a grievance system as required and failing to resolve grievances within 30 days as required by law.

Contact Gianelli & Morris to Fight Bad Faith Insurance Practices in California

If your claim is being unreasonably delayed or denied and you can’t resolve the matter on your own, you can go to the DMHC for help, or you can call us. The DMHC might be able to resolve your dispute and get the claim approved or paid, and they can make the insurance company pay administrative penalties to the Department. We might be able to resolve your dispute and get your claim approved or paid, and we can make the insurance company pay you for additional harm they have caused, including punitive damages for egregious bad faith conduct.

For help getting the medical care and insurance benefits you need and are entitled to under the law, call Gianelli & Morris at 213-489-1600 for a free consultation with a knowledgeable and experienced attorney fighting insurance bad faith in California on behalf of policyholders every day.