DMHC Fines Blue Cross $50,000

The California Department of Managed Health Care has fined Anthem Blue Cross of California $50,000 for what the agency concluded was a deliberate thwarting of the enrollee grievance process.

According to DMHC records, Anthem denied an enrollee's request in 2012 to undergo the duodenal switch form of bariatric surgery, and was contacted by the agency to conducted an independent medical review. Anthem declined to do so, saying that it had not received a communication from a network provider that such a procedure had been determined medically necessary for the patient. As a result, it claimed there was no official denial it could act on.

The DMHC determined that this stance violated the California Health & Safety Code, and that the enrollee only needed to see an in-network provider to be eligible for an independent medical review, regardless of the opinion of that enrollee's doctors.

The agency also concluded that Anthem Blue Cross violated its own internal policies for review of medical service requests, and did not respond to the patient's grievance within five calendar days as required by state law. It also concluded that the enrollee's medical group also failed to respond within the required timeframe when she requested a second medical opinion from a non-network provider.

According to correspondence between Anthem Blue Cross and the DMHC, the insurer agreed to a correction plan that would place its policies within state law and its own internal guidelines.

The penalty is the 25th levied against Anthem Blue Cross in 2014 by the DMHC, the most against any health plan to date this year. The penalties have been accompanied by $276,000 in fines. Anthem Blue Cross has received far more penalties than any health plan since the DMHC was given the authority to regulate insurers more than a decade ago. To date, it has received more than 840 penalties from the agency since 2001, records show.