Anthem Fined $5 Million by California for Consumer Grievances

November 17, 2017

By Chad Terhune, Kaiser Health News

California’s managed-care regulator announced Wednesday it has fined insurance giant Anthem Blue Cross $5 million for repeatedly failing to resolve consumer grievances in a timely manner.

The state Department of Managed Health Care criticized Anthem, the nation’s second-largest health insurer, for systemic violations and a long history of flouting the law in regard to consumer complaints.

“Anthem Blue Cross’ failures to comply with the law surrounding grievance and appeals rights are long-standing, ongoing and unacceptable,” said Shelley Rouillard, director of the Department of Managed Health Care. “Anthem knows this is a huge problem, but they haven’t addressed it.”

Before this latest action, California had already fined Anthem more than $6 million collectively for grievance-system violations since 2002.

The state said it identified 245 grievance-system violations during this latest investigation of consumer complaints at Anthem from 2013 to 2016.

Rouillard cited one example in which Anthem denied a submitted claim for an extensive surgical procedure, even though it had issued prior approval for the operation. Twenty-two calls contesting the denial — placed by the patient, the patient’s spouse, the couple’s insurance broker and the medical provider — failed to resolve the complaint. It was not until the patient sought help from the managed-care agency, more than six months after the treatment, that Anthem paid the claim.

In a statement, Anthem acknowledged there are some legitimate findings in the audit, but it strongly disagreed with the state’s assertion that the problems are “systemic and ongoing.” The company said it will contest the fine.

“Anthem has taken responsibility for errors in the past and has made significant changes in our grievance and appeals process, as well as investments in system improvements,” the company said. “We remain committed to putting the needs of our members first.”

Anthem Inc., based in Indianapolis, sells Blue Cross policies in California and 13 other states.

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