DMHC Fines L.A. Care $150,000
The Department of Managed Health Care has fined L.A. Care Health Plan $150,000 for engaging in a pattern of unfair payment patterns.
The fine, announced on Dec. 16., is by far the largest against L.A. Care levied by the DMHC over the past dozen years. Its highest previous fine was only $15,000.
The patterns surfaced during a routine audit of L.A. Care that took place in 2013, and in some instances were a continuation of issues that dated back to 2010, records show.
The audit uncovered that L.A. Care paid incorrect interest payments on seven of 73 claims, a compliance rate of 90%. State law mandates a compliance rate of at least 95%. The DMHC said that this was tied to the incorrect loading of dates into a new optical character recognition (OCR) service provided by a new contractor. Incorrect date loading occurred between April and August of 2013. L.A. Care resolved the issue by paying $27,281in interest and $14,115 in penalties tied to 2,551 claims.
The DMHC also discovered that in nine of 87 rejected claims, L.A. Care had failed to forward the rejection back to the provider within 10 business days – a compliance rate of 90%. That issue also arose during the agency's 2010 audit. It also discovered that L.A. Care had improperly denied seven of 87 claims, a compliance rate of 92%. L.A. Care remediated that issue by paying an $575,245 and interest of $8,606 for 346 claims.
L.A. Care also failed to respond in a timely manner to 19 of 93 claims that were disputed, and failed to issue formal determinations of claims disputes within 45 days for 30 of the 93 claims, resulting in compliance rates of 80% and 68% respectively.
According to the DMHC, L.A. Care corrected this issue with “improvements to oversight, training, and the implementation of a quality audit tool to ensure timely acknowledgement. The plan also identified management personnel responsible for ongoing compliance.”
The DMHC also acknowledged that L.A. Care had corrected all other outstanding issues. It said the fine settles all the issues.
