The California state flag. Credit: Konstantin Yolshin/Adobe Stock
Officials at the California Department of Managed Health Care are imposing a $15 million fine on Blue Cross of California — a company better known as Anthem Blue Cross — over concerns about how the company has been handling complaints since 2008.
The department also required Anthem Blue Cross to agree to implement a corrective action plan. The plan requires the company to hire an outside auditor to review its compliance with the plan and to open up its records, systems, data and employees to the auditor, according to a letter of agreement posted on the department's website.
Sonia Fernandes, chief counsel for the California Department of Managed Health Care's enforcement office, wrote in an agreement letter, which is dated Jan. 29, that Anthem Blue Cross had seemed to improve compliance with California grievance review standards. The compliance rate improved to more than 90% in June 2024, from about 55% to 80% from April 2021 through May 2024.
But the reported overall compliance rate "plateaued at 90%-92% between June 2024 and April 2025," Fernandes said in the letter.
Anthem Blue Cross said in a statement that it takes all concerns seriously and is committed to responding promptly and fairly.
"In coordination with the DMHC, we have implemented corrective actions to strengthen oversight, governance, and transparency, including staff training and improving processes," the company said in the statement. "Our focus remains on serving members and ensuring they have access to the care and support they need, while working with DMHC to meet regulatory standards."
Anthem Blue Cross: Anthem Blue Cross is a subsidiary of Elevance Health, a big, for-profit company. A separate nonprofit company, Blue Shield of California, operates separately from Anthem Blue Cross.
California's health coverage oversight approach: California uses two separate entities to regulate health coverage providers: The California Department of Insurance oversees carriers classified as insurance companies, and the California Department of Managed Health Care oversees carriers classified as health maintenance organization plans or other types of managed care companies.
The regulators' letter of agreement: California regulators have imposed a series of smaller fines and established a series of other corrective action plans, Fernandes wrote in the letter of agreement.
The earlier fines and corrective action plans reflected concerns about Anthem Blue Cross's "failure to ensure proper identification and rectification of grievances," 175 enforcement actions filed in connection with a 2016 department survey, and delays in acknowledging or resolving 20 enforcement matters reviewed in 2022, Fernandes wrote.
The department later reviewed 148,868 appeals of coverage decisions that Anthem Blue Cross received from July 1, 2020, through Sept. 30, 2022. Regulators concluded in 2024 that Anthem Blue Cross had taken too long to acknowledge 16,642 of the grievances and failed to resolve 4,715 in a timely fashion. It imposed $3.5 million in fines in connection with those violations.
Anthem Blue Cross is still not recording enrollee grievances, considering the grievances or correcting the grievances properly, and it has not consistently ensured that the appropriately licensed professionals participate in quality assurance activities, to make sure that the plan is correcting any problems that need correcting, Fernandes wrote.
"While the plan represented that it had taken substantial steps towards achieving compliance, it took an unacceptably excessive amount of time to achieve its current level of compliance, and the plan's reported compliance level continues to be concerning to the department," Fernandes added.
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