DMHC fines Anthem $1.2M for failing to authorize medically necessary services

October 28, 2020

The California Department of Managed Health Care (DMHC) has fined Anthem Blue Cross in the amount of $1.2 million for its failure to implement two Independent Medical Review (IMR) determinations that required the payor to authorize coverage for medically necessary services.

Anthem initially declined to cover transgender related services for two Medi-Cal managed care patients, and the patients appealed Anthem’s denials through DMHC’s IMR process. The independent reviewer determined the services were medically necessary for each enrollee, and the plan’s denials were overturned. Despite the IMR determinations, Anthem failed to provide the patients with the necessary services in a timely manner. In one case, the services weren’t authorized for 200 days and in the other it was 41 days.

California law requires health plans to authorize the services within five working days of receiving an IMR determination accepted by DMHC. The $1.2 million fine reflects a penalty of $5K/day for failure to authorize the services.  

In both cases, Anthem acknowledged the IMR determinations in correspondence to the enrollee. The payor has acknowledged its failure to comply with the law and has agreed to pay the fine and complete a Corrective Action Plan to settle the issue.

Under California law, patients enrolled in DMHC-regulated health plans have the right to appeal medical necessity denials. If a patient is having trouble getting the care they need, they should first file a grievance with their health plan. If the enrollee does not agree with the health plan's response or the plan takes more than 30 days to fix the problem, they patient can apply for an IMR through the DMHC Help Center at HealthHelp.ca.gov or (888) 466-2219.

During an IMR, independent physicians that do not work for the health plan will examine the case to see if the health plan appropriately denied services, or if the enrollee should receive the requested service or treatment. If it is determined that the health plan should not have denied the enrollee’s request, the plan must cover the service or treatment.

Physicians should be aware that they can assist their patients in filing an IMR as an “authorized assister.” For more information about how treating physicians can assist their patients in seeking an IMR, see California Medical Association health law library document #7155, “Independent External Medical Review.”


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