CA Blues Fined For Big Network Snafus

The Department of Managed Health Care (DMHC) has levied significant fines against Blue Shield of California and Anthem Blue Cross of California for furnishing inaccurate provider directories to its enrollees who signed up through the state health insurance exchange in 2013.

Blue Shield of California was fined $350,000, while Anthem Blue Cross was fined $250,000. Blue Shield received a larger fine because it apparently did not cooperate with the DMHC in its investigation of the matter, the Los Angeles Times reported earlier this week.

The settlement agreement between the DMHC and Blue Shield indicated that the health plan had disputed three of the four assertions the agency had made after a non-routine survey of its provider network, including random phone calls of physicians listed in its directory “and were told by numerous physicians' offices that the physicians did not accept Covered California enrollees.” Anthem Blue Cross also disputed some of the assertions made by the agency.

According to a survey by the DMHC, 18.2% of the physicians listed in Blue Shield’s provider directory were not at the geographic location listed in the directory. Additionally, of those doctors who were at the location listed, 8.8% were not willing to treat those enrollees who sought care.

Among those listed in the Anthem Blue Cross provider directory, 12.5% of the physicians were not at the location listed in the provider directory and, among those who were at the location listed, 12.8% would not treat the patients as being in-network. Those issues led to a “highly unacceptable consumer experience,” according to DMHC documents.

As a result, many enrollees in both plans sought care elsewhere, or were left with deductibles and co-payments far higher than what should have been under the terms of their policies. Many patients also called the DMHC to file complaints. 

“An important element of access is ensuring enrollees have accurate provider directories,” said DMHC Director Shelley Rouillard. “The DMHC has taken enforcement action and fined Blue Shield and Anthem due to unacceptable inaccuracies in their directories. These inaccuracies limited enrollee access to care that resulted in an unacceptable consumer experience and must be fixed.”

Both Blue Shield and Anthem Blue Cross have expended considerable effort in terms of outreach to its provider networks. Blue Shield said it spent more than $14.6 million between June 2014 and June of this year to educate its provider network regarding accepting Covered California enrollees, as well as making it easier for its enrollees to obtain accurate provider information.

According to the agreement with the DMHC, both Blue Shield and Anthem Blue Cross will pay damages to consumers impacted by the network issues. Blue Shield's customer service representatives are also empowered to make spot claims payments if an enrollee calls in with a valid complaint. And both health plans will continue to make outreach to both providers and consumers regarding the accuracy of their directories.

The fine against Blue Shield comes just weeks after it quietly agreed with the DMHC to some premium curbs for its small group and individual books of business, including hard caps in relationship to their profit margins and foregoing mid-year premium hikes.

In another matter, Blue Shield was fined $30,000 for a 2012 incident in which an enrollee was asked to pay a $200 surcharge from a durable medical equipment provider for a breast pump. The surcharge violated the Knox-Keene Act, and Blue Shield did not act in a prompt manner when the enrollee contacted the organization, records show.

The DMHC also fined Aetna Resources for the Living $25,000 for expanding its provider network without specific approval from its Office of Plan Licensing.