Valley Health Plan Fined $100,000
The California Department of Managed Health Care has fined the health plan operated by Santa Clara County $100,000 for arbitrarily short-changing payments to hospitals for treating its critically injured enrollees.
In correspondence from the DMHC, the regulator accused Valley Health Plan of not having employees available around the clock regarding post-stabilization care. As a result, the insurer refused to pay beyond the first day of hospitalization for severely injured patients who were not hospitalized at Santa Clara Valley Medical Center, the county’s hospital.
In one case, a Valley Health Plan enrollee at Regional Medical Center of San Jose who had suffered a brain aneurysm racked up a bill of more than $733,000. Valley Health Plan paid about $221,000. Another patient who suffered head trauma as the result of a train accident ran up nearly $1.1 million in charges, but Valley Health Plan paid just over $330,000. In both cases, the insurer claimed that it had received “late notification” of the patient’s hospitalization at another facility, thereby justifying paying for only the first day of care. Altogether, four different patients who had bills of six or seven figures had had their bills underpaid. The patients were notified in their explanations of benefits that the amounts billed had exceeded their contracted amounts, or reflected a negotiated discount, which the DMHC said was inaccurate. Under California law, payments for emergency care can only be denied if they were not performed.
In addition to the fine, Valley Health Plan also agreed to a corrective action that included keeping an around-the-clock employee to authorize post-stabilization care.
In another action taken against Blue Shield of California, the DMHC fined the San Francisco-based insurer $50,000 for at least 31 different instances where it levied higher co-payments for enrollees for brand-name drugs it considered not to be medically necessary.
The DMHC concluded that Blue Shield should have reviewed the patients’ requests for lower co-payments based on medical necessity, and that the patients also had right to an independent medical review, but were not informed of their options. Blue Shield’s insistence that the denials were based on coverage rather than medical necessity issues were inappropriate, the DMHC concluded.
In addition to paying the fine, Blue Shield also agreed to conduct retrospective review of the 31 patient requests. If it denies coverage at the lower co-payment, the issue will immediately go to independent medical review. Blue Shield will also set up an exception review process for any other enrollees who are impacted but have not yet filed a grievance or stepped forward.
