Ehnes emphasized that while most other states have provisions allowing review of health plan claims payment processes, California's new action is the first time a state regulatory agency has reviewed a large group of plans en masse, specifically targeting how the plans deal with appeals.
One result of the investigation, Ehnes said, is that health plans are now being required to beef up their appeal process resources, including adding staff and providing management and oversight "to avoid further violations of state law."
"Our clear and consistent message is that California's hospitals and physicians must be paid fairly and on time," Ehnes said. "Providers are struggling to stay afloat in a very difficult business environment," exacerbated by the fact that many health plan beneficiaries are now in high deductible plans.
The agency's announcement was supported by the California Hospital Association, the California Medical Association and several health consumer groups.
"We congratulate DMHC for taking aggressive action to ensure that hospitals and doctors are paid accurately and on time. In levying these fines, DMHC is addressing an ongoing, systemic issue that harms the ability of providers to care for their patients," said Jan Emerson-Shea, CHA vice president for external affairs.
CMA president James Hinsdale, MD, however, called the fines "chump change that amount to little more than a slap on the wrist for highly profitable health plans that systematically deny legitimate claims and routinely block, delay or limit physician reimbursements as one tactic to boost their bottom lines."
"Every battle over a claim hurts access to care by taking a physician's time away from treating patients," Hinson continued. "Unpaid claims also cause patients immense stress that can undermine their recovery. It's crucial that DMHC and other regulators remain vigilant and force insurers to follow the law so that doctors can focus on patient care."
But the California Association of Health Plans had a different take on the state's announcement.