California’s health care watchdog just sent a loud message out of Sacramento, hitting Blue Cross of California, doing business as Anthem Blue Cross, with a $15 million fine after a routine audit found what regulators describe as widespread, long-running failures in how the insurer handles member complaints. The action also orders Anthem to work with an independent auditor for up to four years to track fixes and report back. Department of Managed Health Care (DMHC) Director Mary Watanabe said the problems go back more than 15 years and were serious enough to trigger formal enforcement.
In a press release, the Department of Managed Health Care said the penalty and outside oversight follow a routine medical survey that uncovered multiple repeat deficiencies in Anthem’s grievance and appeals operations, which were then referred to the agency’s Office of Enforcement. The Department of Managed Health Care said the independent auditor will report Anthem’s corrective steps, and how well they work, directly to the state regulator.
An Anthem Blue Cross spokesperson told Fox40 that the company “takes member concerns seriously” and has already put corrective actions in place, including staff training and process changes, to address issues identified by regulators. Fox40 reporter Brett Stover noted that Friday’s announcement comes on the heels of a string of recent enforcement actions against the insurer.
What the audit found
The survey, which the DMHC said identified eight Grievances and Appeals deficiencies, found Anthem failed to ensure that oral expressions of dissatisfaction were treated as grievances, did not consistently identify grievances in nearly half of the files reviewed, and did not adequately consider or resolve exempt grievances in about 65% of reviewed cases. The Department also cited operational breakdowns that led to thousands of late or missing grievance-acknowledgment letters and said those repeat failures violated state rules requiring grievance and appeal systems to work reliably for members. The Department of Managed Health Care said the findings were serious enough to justify both a substantial financial penalty and several years of independent oversight…