DMHC Fines Safeguard Health $100,000

The Department of Managed Health Care has fined Safeguard Health Plans $100,000 for engaging in what it determined was an “unfair” pattern of claims handling and payments.

The fine, which was issued late last month, was the result of routine audits of Safeguard dating back to 2008, according to correspondence between the regulator and the Irvine-based health plan. 

Under state law, health plans have to comply with handling and paying claims in a timely manner 95% of the time. A survey of a sample of Safeguard claims found that its time stamps were in conflict with when paid claims were submitted 10% of the time. Among unpaid claims, the stamps were in conflict 12% of the time. Another 20% of unpaid claims had no legible time stamp at all.

Safeguard also did not provide a clear or accurate explanation for a claims denial 6% of the time. It did not pay claims accurately, included penalties and interest, 11% of the time.

Among claims that were under dispute, interest and penalties were not paid properly 39% of the time; 23% were paid more than seven days after they were resolved; and 67% were not accompanied by an “accurate or complete determination letter.”

Safeguard agreed to a corrective action plan, and has paid more than $21,700 in interest and penalties to providers.

The penalty was the largest ever levied by the DMHC against Safeguard, which has had 12 penalties issued against it since 2002. It received a $50,000 penalty in 2005 for not paying claims in a timely manner.

The DMHC has issued eight penalties against insurers so far this year for not paying claims in a timely manner.