DMHC Penalizes Care1st, Contra Costa

The Department of Managed Health Care has taken enforcement actions and levied fines totaling $95,000 against Medi-Cal managed care plans operating near Los Angeles and in the Bay Area.

The DMHC levied a $75,000 fine late last month against Care1st Health Plan, which is based in Monterey Park, just east of Los Angeles. The fine was related to how care was assigned to a special needs prostate cancer patient in 2011.

According to DMHC records, the patient had been diagnosed with cancer prior to joining Care 1st. His urologist recommended robotic surgery at City of Hope National Medical Center, which was an out-of-network provider. 

Care1st initially rejected the recommendation, but allowed the patient to obtain a second opinion from another urologist. 

That physician recommended the patient undergo the operation, and submitted a treatment request marked urgent. However, Care1st's medical director changed the request from urgent to routine. The patient's mother made eight phone calls to Care1st during December 2011 to learn the status of the surgical request. It was not approved until late December, and Care1st moved the patient to an in-network provider for the surgery.

DMHC fined Care1st for not referring the patient to a urologist who had experience with the robotic surgery, not approving the request for care in a timely manner, and not treating the mother's phone calls as a legitimate patient grievance, among other issues.

Alan Bloom, Care1st's vice president for legal and regulatory services, said the physician the patient had been referred to had qualifications similar to the first urologist. He added that the health plan's “policies and procedures so it will not reoccur.”

Bloom confirmed that the unnamed medical director remains with Care1st.

Care1st, which has about 421,000 enrollees, was fined by the DMHC $120,000 in March 2013 for outsourcing some of its services overseas without proper regulatory oversight.

The DMHC also levied a $20,000 fine against the Contra Costa Health Plan for failing to have an effective dispute resolution mechanism; not paying providers in a timely manner after payment disputes were resolved; paying inaccurate interest rates for those late payments; and not denying a claim within 45 working days. Contra Costa installed a new claims system and improved oversight and reporting to its chief executive officer. The plan, which offers coverage to both Medi-Cal enrollees and public employees, has about 120,000 lives.

It's the second substantial penalty against Contra Costa in seven months. 

The DMHC fined it $105,000 last October for failing to maintain proper levels of tangible net equity.So far in 2014, the DMHC has levied 65 penalties against health plans with fines that have totaled nearly $693,000. 

At the same time in 2013, the agency had issued 33 penalties and $305,500 in fines.