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California fines Anthem Blue Cross $5 million for ignoring customer complaints

File: The Anthem Blue Cross headquarters on February 9, 2010 in Woodland Hills, California.
David McNew/Getty Images
Anthem Blue Cross headquarters in Woodland Hills.

California's Department of Managed Health Care fined Anthem Blue Cross $5 million Wednesday for "systemic" violations of its grievance policies

"This is a longstanding and ongoing problem that Anthem has had for over 14 years. And they need to be held accountable for this failure," said department director Shelley Rouillard.

By state law, insurers are required to respond to consumer grievances within 30 days in most cases. That time frame shrinks to 72 hours in cases when a customer’s health is in danger. The state says it found repeated violations of both.

The state agency had previously fined Anthem a total of $5.9 million for 2,102 violations of its grievance system between 2002 and 2016. Those violations were based on referrals from Managed Health Care's complaints hotline.

Referrals from the hotline led the state to find another 246 violations between 2013 and 2016, and a separate "systemic review through six medical surveys" of Anthem's operations found "significant numbers of grievance system violations," according to the department's complaint.

According to the state, some Californians waited months to have their grievances resolved. In one instance, the insurer denied a claim for surgery for a customer with a serious condition. Anthem did not resolve the member’s complaint after 22 calls to the company. Managed Care says Anthem only recognized the issue once the state regulator stepped in.

Rouillard says other California insurers have failed to handle consumer complaints quickly, but Anthem is the worst offender.

"To some extent, all of the plans have problems with their grievance and appeals systems—those are issues that we address with each individual plan—but Anthem is by far the outlier when it comes to not resolving or not adequately addressing enrollee grievances."

While Anthem "allegedly implemented" Managed Health Care's proposed corrective actions, "significant problems remain," the agency said.

Anthem "strongly disagrees with the ... findings and the assertion that these findings are systemic and ongoing," the company said in a statement.

The insurer acknowledged that "there are legitimate findings in this audit," adding that it is "taking the necessary actions to address them. Anthem has taken responsibility for errors in the past and has made significant changes in our grievance and appeals process, as well as investments in system improvements."

The company claimed the regulatory body "has not fulfilled its obligations to clarify the regulatory standards and definitions being applied in the audits, despite multiple requests from Anthem to do so."