Earlier today, the California Department of Managed Health Care (DMHC) announced nearly $5 million in fines against the seven largest health plans in the state for violations in paying claims (late, inaccurate, or otherwise) to thousands of doctors, hospitals, and other health care providers statewide. The fines–along with restitution to these providers of millions of dollars–are the result of an 18-month investigation of the insurers stemming from provider complaints. In addition to penalties, the DMHC has ordered changes to health plans’ payment practices.
Audits found that all seven plans violated the minimum legal threshold of paying 95 percent of their claims correctly, and that not only did the plans not pay some claims accurately, but the appeals process was also often flawed. Five of seven plans were found to violate provider dispute resolution procedures–the methods providers must use to protest an underpayment or claims denial and get a corrected payment.
The health plans receiving fines are:
* Anthem Blue Cross for $900,000;
* Blue Shield of California for $900,000;
* United/PacifiCare for $800,000;
* HealthNet for $750,000;
* Kaiser Foundation Health Plan for $750,000;
* Cigna for $450,000; and
* Aetna for $300,000
…for a total of $4.85 million.
Why should consumers care? Patients expect health plans to pay claims to doctors and hospitals fairly and promptly so they can get the care they need. Consumers would rather that the time and resources of health providers go to patient care, rather than in fighting to get insurers to pay correctly. And ultimately, consumers should not get caught in disputes between providers and plans. It’s good the DMHC is using its existing authority to require prompt, fair payment of claims… and the new federal health law will provide more tools for the overall oversight over insurers.