San Francisco Chronicle
November 30, 2010
Blue Shield, Kaiser among state insurers fined
By Victoria Colliver
State regulators Monday fined seven of California's largest health insurers nearly $5 million for systematically failing to pay doctors and hospitals fairly and on time.
The California Department of Managed Health Care issued the fines following an 18-month audit in which investigators looked at a small but statistically significant sample of claims. The investigation found the plans were paying on average about 80 percent of the claims correctly, far below the legal threshold of 95 percent.
"Our clear and consistent message is that California's hospitals and physicians must be paid fairly and on time," said Cindy Ehnes, director of the Department of Managed Health Care, which is charged with regulating the states' health maintenance organizations, or HMOs.
In addition to the fines, the companies must pay the doctors and hospitals restitution that is expected to run into the "tens of millions of dollars," Ehnes said. The plans will also be required to come up with a plan to correct the problem and submit to future audits.
Five of the insurers, excluding Anthem and Blue Shield, were also found to have improper provider appeals processes.
When doctors and hospital officials try to dispute a claim, they often have to deal with the same individual who originally denied the claim in the appeals process, Ehnes said.
Cracking down on the health plans for not properly paying providers helps consumers, said Anthony Wright, executive director of Health Access California.
"Consumers would rather that the time and resources of health providers go to patient care, rather than in fighting to get insurers to pay correctly," he said.
Comment: What services do the private insurers provide for us? Processing claims? They won't even do that right 20 percent of the time, according to this California audit. The total of $5 million in fines that they were assessed is so paltry that they have no incentive to discontinue their highly profitable policy of delaying and denying legitimate claims.
Let's have the members of Congress fire the insurers and set up our own national health program - an improved Medicare that covers everyone. If they won't do that then let's fire them, replacing them with responsible elected stewards who will.