Molina Is Fined $500,000 By DMHC

Long Beach-based Molina Healthcare has been fined $500,000 by the Department of Managed Health Care  for what the agency said was the mishandling of appeals and grievances by enrollees on a significant scale.

Perhaps the biggest issue was that Molina “did not implement and maintain a grievance system that included an appeals process that consistently ensures the person making the final determination for appeals involving medical necessity is an appropriate healthcare professional with clinical expertise who did not participate in prior decisions related to the grievance,” according to a non-routine survey of Molina that the DMHC conducted last year. 

That survey stemmed from a routine 2013 survey after Molina was unable to produce full documentation of medical reviews connected to requests for authorization of services.

The DMHC also concluded that Molina had not maintained an appeals process that ensured that enrollees received notification of their appeals request within 30 days. It also concluded that its utilization management process was faulty. It noted that many cases included “multiple files...substantiating medical necessity, yet denial letters cited criteria or guidelines and included denial reasons that were inconsistent with the medical documentation in the file.”

However, the agency has concluded that Molina has corrected all the deficiencies. The correction process included hiring of new employees to handle enrollee grievances, formation of a special triage team and additional training of its physician medical directors, among others.

The DMHC has agreed to suspend $250,000 of the fine until the final report on Molina's most recent survey is issued.

In other departmental actions, the DMHC has fined Contra Costa Health Plan $210,000 for failing to meet minimum tangible net equity for four consecutive months in 2007 and another month in 2010. 

Contra Costa failed to file its quarterly financial reports in a timely manner 11 times between 2007 and 2011.

The DMHC agreed to suspend $150,000 of the penalty if Contra Costa Health Plan follows a settlement agreement for the next two years.