Disenrollments Cost Anthem $700,000
The California Department of Managed Health Care (DMHC) has fined Anthem Blue Cross of California $700,000 for a series of inadvertent disenrollments and warnings to enrollees regarding late premium payments that were issued in 2013 and 2014.
According to the DMHC, Anthem mishandled the premiums of nine enrollees, allowing their coverage to be terminated for non-payment. Another 43 had their policies cancelled without providing the appropriate notice of a 30-day grace period. And there were 71 instances of Anthem canceling coverage prior to the expiration of the grace period. In some of the cases, the DMHC found 12 aggravating instances that included wrongful rejection of a claim, improper handling of grievances, and failure resolve grievances within 30 days.
The DMHC suggested in its correspondence that it would have litigated the matter in court, but accepted the fine instead. Altogether, the fine was comprised of fines of $10,145 levied for 69 different violations.
As part of the action, Anthem has agreed by the end of this month to modify its correspondence templates and revise its computer system that issues the letters to be compliant with state law. It has also agreed to provide new training to its enrollment and billing staff on the current law and requirements. Within one year, Anthem will complete a comprehensive review of its explanation of cancellation system and make changes in conjunction with the DMHC's Office of Plan Licensing in order to remain compliant.
An Anthem spokesperson could not immediately say what corrective actions the insurer would take in the coming months.
The fine is the 11th largest levied in the DMHC's history, records show but is only the fourth-largest fine issued against Anthem Blue Cross. The insurer recently received its 1,000th administrative penalty and fine – more than triple the second-highest total. Anthem has received more than a quarter of the penalties and fines assessed against health plans by the DMHC, records show.
In another action, the DMHC seized the license of insurance broker Anne Marie Delgado of South Gate. She and her affiliated company had been selling Medicare Advantage policies when she was not authorized to do so. That earned an admonishment from the DMHC, which she later concealed on a 2015 application to sell Medicare policies for Care1st Insurance Plan.
