DMHC Doles Out $120K in Fines to Five California Health Plans
Five health plans in California have been fined by the state Department of Managed Health Care, Payers & Providers reports.
The fines were issued in response to an audit that was called for after a 2012 incident related to utilization review services from Accountable Health Care IPA, a Signal Hill-based medical group (Payers & Providers, 9/10).
In August 2012, DMHC issued a cease-and-desist order against Accountable Health for allegedly conducting illegal utilization reviews and making medical necessity decisions for insurers. DMHC accused the group's vice president and another employee of engaging in utilization reviews on behalf of nine health plans, even though the employees are not licensed physicians.
California law requires individuals who engage in prospective medical reviews to be licensed physicians.
The reviews can lead to changes in care or denials of specific types of treatment for patients.
In October 2012, DMHC and Accountable Health reached a settlement, known as a stipulated agreement, and DMHC replaced its cease-and-desist order with a consent decree.
In return, Accountable Health agreed to use an outside monitor for at least three years to ensure that the group complies with prior medical authorization laws. The group also agreed to:
- Donate $500,000 over two years to groups that provide care to uninsured or underinsured individuals; and
- Undergo a prospective review of all claims it had handled since January 2009 and repay any improperly reconciled payments with interest (California Healthline, 10/25/12).
Details of Fines
Following the incident, DMHC hired Berkeley Research Group to conduct an audit to determine whether Accountable Health appropriately processed claims. The audit was conducted from July 2014 to September 2014.
The audit found that Accountable Health often did not:
- Complete utilization management reviews in a timely manner;
- Include interest and penalties for late-paid claims;
- Keep adequate records for when claims were filed; and
- Pay claims in a timely manner.
- Anthem Blue Cross, which was fined $40,000;
- Care1st, which was fined $20,000;
- Health Net, which was fined $50,000;
- L.A. Care Health Plan, which was fined $5,000; and
- Molina Healthcare, which was fined $5,000 (Payers & Providers, 9/10).