Anthem Blue Cross Fined By California For Failing To Address Consumer Grievances

The California Department of Managed Health Care recently fined Anthem Blue Cross $415,000 for failing to quickly or completely answer consumer complaints. In a statement, the Department said it had uncovered 40 cases involving 83 violations, such as Anthem’s failing to addressing consumer complaints within 30 days or failing to provide state investigators with adequate information.

This rebuke is especially significant, because it comes at a time when Anthem is attempting to win federal and state approval for its $53 billion acquisition of Cigna, and because it demonstrates how widespread these violations are among health insurance companies.

California Insurance Commissioner Dave Jones held a public hearing on the merger on March 29th, and is currently reviewing testimony. DMHC Director Shelly Rouillard also held a hearing, and during that hearing she said one of the areas DMHC would be paying close attention to how the company handled grievances and appeals.

Rouillard stated that all of California’s health plans have not adequately addressed consumer grievances, but “for Anthem, it’s an ongoing systemic problem. Anthem has the largest fines. They have the largest pattern of violations of enrollment grievances.” California health care consumer protection laws give patients that right to prompt appointments, second medical opinions, and explanations if they are denied care. In the past, DMHC has repeatedly said a health plan’s grievance program is critical, and that a strong grievance program will help insurers identify systemic problems and improve customer service.

The consumer advocacy group Health Access applauded the decision to fine Anthem, and pointed out that the company’s handling of grievances has been a problem for years. Policy Counsel Tam Ma also reminded folks that the Anthem-Cigna merger “is pending right now, and we don’t think they should be allowed to get bigger until they fix these problems.” She expressed concern that if Anthem acquires Cigna, problems with addressing consumer grievances would be magnified.

Anthem has paid over $2 million in fines for this exact violation since 2011. Last year, it also had pay the DMHC $250,000 in a different case for overstating its physician network in policies sold on California’s health exchange. Anthem additionally had to pay millions of dollars in refund to customers that had depended on inaccurate provider directories, and so as result they had received unforeseen medical bills when they went to out-of-network providers. These problems are not limited to California—Anthem has failed to help consumers and violated regulations in many other states, and been fined by other Insurance Departments.

The fact that Anthem has a systemic problem with helping consumers, that these violations have occurred for years and not been corrected, and that these violations occur in different states, is a clear sign that this is not a high priority. Such behavior should not be rewarded. If Anthem cannot adequately assist and protect consumers in its current state, how will it do so when it has acquired Cigna and millions of new consumers? The California Department of Managed Health Care, Department of Insurance, and other Insurance Departments should oppose the merger of Anthem and Cigna until there is clear and convincing evidence that these problems have been solved.