DMHC Fines PacifiCare Over Late Payments
The Department of Managed Health Care announced yesterday that it will fine PacifiCare of California for making late payments to providers, the Orange County Register reports. DMHC Director Daniel Zingale said an "on-site examiner" will be sent to the health plan to set the amount of the fine and to ensure that the company pay its late bills in full, including interest, within the next 60 days. The department added that PacifiCare "violated a state law requiring HMOs to pay medical claims within 45 working days." Zingale said that the penalty was the "first of its kind against a California health plan." PacifiCare attributed the late payments to its switch from a capitation model of paying providers to fee-for-service, which resulted in more claims. "In the tight labor market that exists in Orange County, we weren't able to hire claims examiners fast enough to keep up with this temporary bubble," Nancy Monk, a PacifiCare vice president, said. She added that the company had hired more workers and improved its resources in an effort to address the late payments (Wolfson, Orange County Register, 2/23).
The PacifiCare case is the latest example of the "endemic" problem of health plans making late payments, the Register reports. Jan Emerson, spokesperson for the California Health Care Association, said that a survey her organization conducted last year found that 85 California hospitals had not received more than $1 billion in payments owed by insurers. "There are all kinds of bureaucratic hurdles that hospitals and doctors have had to jump over to get very legitimate claims paid. And these are for services already rendered. Hospitals have already paid the doctors, already paid the drugs and the equipment -- we're out the money," she said. The Register reports that providers and insurers often "disagree on what constitutes a 'clean' payable claim," with physicians and hospitals stating that insurers often send claims back to them solely for the purpose of gathering more technical information. Health plans, on the other hand, believe that billing abuse cuts both ways. Walter Zelman, president of the California Association of Health Plans, said, "I am sure there are health plans that sometimes bill inappropriately. I am equally sure that there are physicians and hospitals that bill inappropriately. If health plans come to believe that certain physician groups or individual physicians or hospitals are padding bills ... then they begin to look more aggressively at the bills." He added that he would like to see the creation of a state agency to regulate "how doctors and hospitals bill for their services" (Wolfson, Orange County Register, 2/23).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.