DMHC Fines SF Health Plan $30,000

The Department of Managed Health Care (DMHC) has issued a $30,000 fine against the San Francisco Community Health Authority (SFCHA) for mishandling payments of provider claims.

The SFCHA operates the San Francisco Health Plan, which provides Medi-Cal managed care coverage to low-income residents of San Francisco.

According to correspondence between the DMHC and the SFCHA, the issue with claims arose during a routine audit that took place in early 2012. The issues with the adjudicated claims were linked to a programming error involving a new claims system the health plan had installed at the start of the year. SFCHA addressed the issues as soon as they were discovered, according to the DMHC.

However, the agency concluded that the plan failed to provide clear explanations for denying or adjusting payments for claims in 8% of the claims examined, and failed to settle disputed claims correctly, including the payment of interest and penalties, in 20% of the disputed claims examined.

In addition to implementing a corrective action plan that included additional training of staff, SFCHA also paid more than $195,000 to remediate 18,086 claims that were paid or adjusted late, and more than $21,700 to settle 1,130 provider disputes.

In another move taken by the DMHC, the agency has terminated the conservatorship for the Alameda Alliance for Health. It seized its operations and appointed a conservator in May 2014.

At the time of the seizure, Alameda Alliance was about $6.2 million short of the required tangible net equity of $21.8 million to continue operating under state law. According to the order ending the conservatorship, Alameda Alliance has tangible net equity of 474% above what is required.

Alameda Alliance for Health reported net income of $44.8 million on revenue of $81.5 million for the quarter ending June 30. 

For fiscal 2015 Alameda Alliance reported net income of $70.5 million on revenue of $751.8 million.