DMHC Press Release

December 13, 2023 Press Release


Wednesday, December 13, 2023


DMHC Fines Blue Shield of California $200,000 for Mishandling Provider Claims

(Sacramento) – Today, the California Department of Managed Health Care (DMHC) is announcing an enforcement action against California Physicians’ Service (Blue Shield of California), including a $200,000 fine for mishandling provider claims which resulted in a health plan member not getting the care they needed.

“Health plan members have the right to receive treatment for health conditions without facing barriers and delays caused by a plan’s mishandling of claims payment requests from providers,” said DMHC Director Mary Watanabe. “We are holding health plans accountable. Blue Shield of California has taken corrective actions to improve the way it handles provider claims and prevent these types of delays from happening again.”

BACKGROUND: The health plan member was diagnosed with gender dysphoria and received services from an out-of-network provider between March 2021 and December 2021. The plan authorized the member to receive the services from the out-of-network provider, but the plan inappropriately adjusted several claims payment requests from the provider. As a result of the plan’s actions, the provider suspended services to the member.

The health plan member filed a grievance with the plan regarding the failures to pay the provider claims. The plan’s response failed to address all of the member’s concerns and did not provide an explanation or resolution to the issues raised. The plan violated California law when it failed to consider and resolve the member’s grievances.

After the health plan member contacted the DMHC, the Department identified 13 provider claims related to the member’s care that were not processed correctly. During the investigation, the Department found the plan failed to timely process eight additional provider claims for services impacting other health plan members between January 2019 and July 2022. According to the law, a plan must reimburse claims as soon as possible but no later than 30 business days after receiving the claim.

CORRECTIVE ACTIONS: The plan has since paid the fine and implemented corrective actions, including updating its claim processing procedures to ensure claims are processed correctly. Blue Shield of California implemented corrective actions to improve the future processing of provider claims, including providing feedback to claims processors, updating claims procedures, instructing vendors to conduct training on out-of-network claims, and reviewing procedures on handling grievances.

WHAT HEALTH PLAN MEMBERS CAN DO: Health plan members have health care rights including the right to appeal health plan decisions. The DMHC encourages health plan members experiencing issues with their health plan to file a grievance or appeal with their health plan. If the member does not agree with their health plan's response or the plan takes more than 30 days to fix the problem for non-urgent issues, the DMHC Help Center can work with the member and health plan to resolve the issue. The health plan member can file a complaint with the DMHC Help Center at or 1-888-466-2219. The DMHC Help Center can also help health plan members with urgent issues that cannot wait for the 30-day appeal process.


About DMHC:

The California Department of Managed Health Care (DMHC) protects the health care rights of 29.7 million Californians and ensures a stable health care delivery system. The DMHC Help Center has assisted 2.8 million Californians to resolve complaints and issues with their health plan. The DMHC Help Center provides assistance in all languages and all services are free. For more information visit or call 1-888-466-2219.