IPA Troubles Lead To Big Plan Fines

The Department of Managed Health Care has issued $120,000 in fines to five separate health plans in connection to a 2012 incident where the Accountable Health Care IPA was using a non-physician to make medical treatment decisions.

Molina Healthcare, Health Net, L.A. Care Health Plan and Anthem Blue Cross of California had been ordered to stop using Accountable Care’s utilization review services after the incident, when it was discovered that the son of Accountable Care’s CEO was making decisions to approve or deny medical care to their enrollees. Under state law, a physician is required to make such decisions. Accountable Care agreed to make a $500,000 donation to settle the charge with the agency, and agree to ongoing monitoring.

In addition to that violation of state law, the DMHC hired an outside contractor, Berkeley Research Group, to audit whether the claims processed by Accountable Care were being handled appropriately. 

The audit, which took place  between July and September of last year, determined that in many instances Accountable Health Care did not pay health plan claims in a timely manner, include interest and penalties with the late-paid claims, keep proper records of when claims were filed, or finish utilization management reviews in a timely fashion.  State law generally requires at least 95% compliance in each category.

Altogether, Berkeley sampled a total of 800 claims that were handled by Accountable Health Care. 

Berkeley determined that 64 of the claims, or 12.5%, were not logged and acknowledged in a timely manner, which is two business days for an electronic claim and 14 business days for a paper claim. 

Another 103 claims were not processed within 45 business days, or 12.9%.

Of the 400 claims that were determined to have been paid late, 41 did not include the required interest and penalties, or 10.2% in total.

The audit also concluded that Accountable Health Care had no system in place that keeps records as to when paper claims are received, such as the use of a time stamp.

The fines ranged from $5,000 for Molina Healthcare and L.A. Care to $50,000 for Health Net. Care1st was fined $20,000, while Anthem Blue Cross was fined $40,000. All agreed to continue cooperating in the agency’s ongoing scrutiny of Accountable Health Care.