DMHC Fines Health Net $300,000

The Department of Managed Health Care has levied a $300,000 fine against Health Net and issued cease and desist orders against Anthem Blue Cross and Blue Shield of California for denying speech and occupational therapy coverage to its members.

According to the DMHC, the health plans had been regularly denying coverage of such therapies to members with autism, developmental disabilities and other medical conditions. 

DMHC documents incidate that Health Net had denied coverage in at least 41 separate occasions since 2010. The insurer had cited a policy indicating speech therapry was not medically necessary for enrollees who developed disorders before 18 months of age, or for cerebral palsy. Health Net reversed course in five cases, but an independent medical review conducted in conjunction with the  DMHC concluded in the remaining 36 cases it was medically necessary in all but one.

In Anthem Blue Cross' case, the DMHC determined that it had denied speech or occupational therapy in 24 instances where it was actually medically necessary. In Blue Shield's case, the agency determined that 14 patients had been denied therapy when it was medically necessary.

In addition to the fine Health Net was ordered to pay, the insurers were ordered to provide the therapies to the enrollees moving forward, and reimburse them for any speech or occupational therapy they paid for out of pocket.

“Medically necessary speech and occupational therapy are basic health care services that health plans must cover,” said DMHC Director Brent Barnhart. “Today’s actions will ensure that members receive the care required by law.”