California Fines Health Insurer for Mishandling Complaints of Delayed, Denied Claims

As national scrutiny of health insurance intensifies, California officials have fined Anthem Blue Cross $3.5 million for mishandling member complaints over coverage denials and other issues.

The fine stems from the company’s failure to handle more than 10,000 complaints from its members in a timely manner over a two-year period, according to the state’s Department of Managed Health Care. Patient care advocate Linda Winkler Garvin said such behavior can be medically dangerous for patients and strain their mental health as well.

“It affects their life because many people — whether they [have] cancer or have chronic diseases or an acute problem — need that authorization as soon as possible and within those required days,” she told KQED. “It’s deleterious to their health to not get these on time.”

DMHC began investigating Anthem Blue Cross, also known as Blue Cross of California, after the company reported a large number of late acknowledgment and resolution letters. These are sent when a patient files a complaint, otherwise known as an appeal or grievance, after receiving a denial for health care services they requested or dealing with another delay or modification to their care.

California law requires companies to acknowledge receiving the complaint within five days, but DMHC found that between July 2020 and September 2022, Anthem did not send acknowledgments of 11,670 member grievances within that window. More than 1,600 were not acknowledged for more than 51 days.

Anthem also failed to resolve grievances and issue a written resolution within the standard 30-day window in many cases. More than 4,000 resolution letters were sent out late, including 1,630 after more than 51 days.

Garvin said that there are many cases in which getting timely responses from health insurers is imperative.

Patients who need medications to treat chronic or mental health conditions could lose progress if they are no longer able to get them covered by insurance.

“If there’s periods of weeks or days that the individual or the patient does not get that treatment because it’s delayed authorization, it just exacerbates the problem,” she said.

There are also acute injuries or cancer diagnoses that require time-sensitive procedures.

Plus, waiting on hold, following up on delayed claims or trying to get an explanation for why a claim was denied can be extremely stressful and frustrating for patients.

“It affects them physically and emotionally,” Garvin said. “I’m talking to people, and they’re calling 12 times, 20 times and many times, people don’t get back to them. If they do, they say there’s a delay and don’t give a particular reason.”

“It puts patients through an ordeal they should not have to go through,” she continued.

Anthem said it has collaborated with DMHC to address the matter and takes member concerns seriously. DMHC said the company has paid the fine.

“As part of our commitment to improving the member experience, we’ve made meaningful updates to our grievance and appeals process and invested in advanced system enhancements,” an Anthem Blue Cross spokesperson said. “These changes are designed to simplify the health care journey and better serve our members.”