Anthem To Settle Late Claims Dispute
Anthem Blue Cross of California has reached terms with the Department of Managed Health Care to settle incorrect interest payments on emergency care claims submitted by providers that were mishandled by the insurer.
The settlement was announced as the DMHC has come under pressure by an outside group in recent weeks regarding its policing health plans.
According to the terms of the agreement and information supplied by Anthem, the insurer will pay approximately $3.2 million to 4,650 providers to settle the claims, which were made between July 2007 and April 2011. The payments reflect annual interest of 15%, plus additonal penalties.
“We agreed to a methodology to readjudicate the claims in question,” said Anthem spokesperson Darrel Ng.
Ng added that 85% of the providers are expected to receive payments of less than $100. Payments are to be made within 120 days, he added.
The DMHC turned up systematic flaws in Anthem's claims processing system during a routine audit in 2008.
According to the DMHC, up to half of certain emergency claims in certain Anthem audit samples were either paid late or not paid at all.
Ng said that as part of the settlement, Anthem agreed to corrective actions that include increased training, additional audits and revised claims procedure. In exchange, the DMHC agreed not to test certain kinds of emergency claims handled by the insurer.
“The proper payment of claims is crucial to the success of California's healthcare delivery system. The agreement ensures that healthcare providers will be paid fairly and accurately and underscores our commitment to providers,” said DMHC Director Brent A. Barnhart.
It is unknown whether the amount Anthem has agreed to pay is an accurate reflection of what was owed to providers, according to Molly Weedn, spokesperson for the California Medical Association. She added that many providers only keep their claims records for three years, and may not be able to come up with precise totals.
The settlement with Anthem – which came after more than a year of acrimonious negotiations – was announced a couple of weeks after a DMHC top manager was questioned about the collection of monetary penalties from health plans during a routine state Senate Budget and Fiscal Review hearing.
Subcommittee Chairman Sen. Bill Monning, D-Carmel, asked the agency on April 4 about a drop in the collection of fines levied against health plans after 2010 as part of the enforcement action process. Payers & Providers reported in February that the amount of fines levied last year totaled $451,000, compared to $2.2 million in 2010 and nearly $3 million in 2011. They had dropped significantly after Barnhart was appointed in the summer of 2010.
“The DMHC sometimes takes actions that don't include monetary penalties,” DMHC Chief Deputy Director Shelley Rouillard told the subcommittee. “Sometimes it includes fines, sometimes it involves other enforcement actions.” Rouillard joined the agency in September 2011, less than three weeks after Barnhart took over.
The issue was brought up during the public comments portion of the hearing by Our Salud, a Los Angeles-based advocacy group. Group officials noted that more fines could help DMHC’s budget.
