California fines top health insurers for overstating Obamacare networks
from https://www.latimes.com/business/healthcare/la-fi-obamacare-network-probe-20151103-story.html
California regulators fined two insurance giants for overstating their Obamacare doctor networks and said the companies will pay millions of dollars in refunds to patients who paid too much for care.
The state’s Department of Managed Health Care levied fines of $350,000 against Blue Shield of California and $250,000 for Anthem Blue Cross.
At issue were the companies’ error-riddled provider directories that frustrated many consumers statewide as they tried to find doctors during the rollout of the Affordable Care Act in 2014. As a result, some patients incurred big unforeseen medical bills because they unwittingly went out of network for care.
In addition to the state's enforcement action, consumer lawsuits are still pending against both insurers.
“The DMHC has taken enforcement action and fined Blue Shield and Anthem due to unacceptable inaccuracies in their directories,” said Shelley Rouillard, the agency's director. “These inaccuracies limited enrollee access to care that resulted in an unacceptable consumer experience and must be fixed.”
Regulators said both plans must improve the accuracy of their provider directories and reimburse enrollees who may have been negatively affected by the misleading information.
The state said Blue Shield has already reimbursed more than $38 million to enrollees who incurred out-of-network costs. Officials said they didn't have a reimbursement figure for Anthem yet.
Anthem and attorneys representing consumers said they are close to settling a class-action case that would set aside money to cover past medical bills.
Both companies will report to regulators on the final number of enrollees reimbursed and the total amount paid out. The state urged consumers who have questions — or believe that they should receive reimbursement — to contact the companies.
A year ago, the Department of Managed Health Care released the results of a five-month investigation into the doctor networks advertised by both insurers.
More than 25% of physicians listed by Anthem and Blue Shield weren't taking patients in the Covered California health exchange or were no longer at the location listed by the companies, according to the state's investigation.
In response to consumer complaints, California lawmakers approved legislation this year requiring insurers to update their provider directories weekly to improve accuracy.
“We don't allow grocery stores to sell food mislabeled with the wrong ingredients,” said Anthony Wright, executive director of Health Access, a consumer advocacy group that backed the legislation. “We can't have a functioning insurance market if consumers don't know what they are buying.”
Anthem and Blue Shield have been the top two insurers by enrollment in the state's Obamacare exchange, with roughly 800,000 members combined.
The insurers have acknowledged mistakes were made as the companies raced to overhaul their policies and networks for the implementation of the health law in 2014.
“During this time of unprecedented change and despite Anthem’s continual efforts to improve the accuracy of the system, Anthem’s provider directory inadvertently listed some providers” that weren’t part of the policyholders’ network, said spokesman Darrel Ng.
“In the last two years, Anthem has spent more than $4 million improving the provider directory to make it more user friendly and to improve the accuracy of the data,” he said.
Indianapolis-based Anthem is the nation’s second-largest health insurer.
In a statement, Blue Shield said it “believes this agreement is in the best interest of our members. The settlement addresses past issues raised in 2014, and our members should not be concerned about their current plan or its networks.”
State officials said they slapped Blue Shield with a heftier fine because it was less cooperative during the investigation.
“There was a lack of timeliness in receiving responses and overall cooperation from Blue Shield, so the fine was a little higher,” said agency spokeswoman Rachel Arrezola.
Kevin and Jane McCarthy of Thousand Oaks are among the consumers suing Blue Shield over out-of-network medical bills in San Francisco County Superior Court.
McCarthy said he and his wife spent nearly $2,000 out of pocket to see their primary-care physicians and a neurologist last year.
He said he had checked Blue Shield's online listing of network doctors for his Silver PPO plan during the sign-up process and confirmed the information with a company representative by phone.
But he said Blue Shield's information was wrong and that he got stuck paying higher out-of-network charges.
“It was false advertising, and Blue Shield needs to pay for what they did,” McCarthy said. He wasn't impressed by the state's fine of $350,000.
“Blue Shield is getting off with a slap on the wrist,” he said.
Consumer Watchdog, a Santa Monica advocacy group, is spearheading the litigation against Blue Shield and Anthem.
Jerry Flanagan, the group’s lead staff attorney, said Blue Shield’s reimbursement process puts too big a burden on consumers to file claims, so his organization will keep pursuing a legal settlement with better terms.
Blue Shield said it doesn't comment on pending litigation.
The managed-care agency has begun a new survey of Anthem and Blue Shield's physician networks to check whether problems have been resolved. The results might be available early next year.
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