State Orders Anthem To Pay Back Providers for Outstanding Claims

On Thursday, the California Department of Managed Health Care ordered Anthem Blue Cross to reimburse hospitals and physicians for outstanding claims dating back to 2007, saying the insurer failed to resolve violations discovered in a state audit, the AP/San Francisco Chronicle reports.

It is unclear how much Anthem would need to pay to comply with the order.

Background

In 2008, DMHC audited California's seven largest health plans in response to health care providers' complaints about inappropriate denials and late or inaccurate payments (Tayefe Mohajer, AP/San Francisco Chronicle, 1/12).

In response to the audits, six of the insurers submitted corrective action plans and paid health care providers, but Anthem did not take steps to pay health care providers for violations, according to DMHC.

Details of the Order

DMHC gave Anthem 30 days to submit a plan of correction to the agency.

The department also ordered Anthem to identify claims violations (Robertson, Sacramento Business Journal, 1/12). Claims found to have been wrongly paid would need to be repaid with interest.

Anthem's Response

According to DMHC spokesperson Rodger Butler, Anthem said it would need to review 2.6 million claims to comply with the order.

Anthem spokesperson Darrel Ng said DMHC's order was unexpected because Anthem already paid a $500,000 fine associated with the audit in November 2010 (AP/San Francisco Chronicle, 1/12).

At that time, a DMHC letter cited an administrative penalty of $900,000 for Anthem. The agency said it would suspend $400,000 of that figure if Anthem were to show full compliance with laws governing payment of claims (Sacramento Business Journal, 1/12).

DMHC said the fine did not resolve corrective actions required by the audit (AP/San Francisco Chronicle, 1/12).