Tuesday, July 22, 2025
DMHC fines Blue Cross $500,000 for failing to correct deficiencies including mishandling member complaints
(Sacramento) – The California Department of Managed Health Care (DMHC) fined Blue Cross of California Partnership Plan, Inc. (Blue Cross) $500,000 for failing to correct deficiencies identified in a medical survey, or audit, of the plan’s operations. This included direct impacts to members, including failing to properly handle and resolve health plan member complaints, also called grievances or appeals. In addition to the fine, the plan must implement corrective actions to resolve all deficiencies.
“When the Department finds a health plan is not following important consumer protections in the law, the plan must take corrective action,” said DMHC Director Mary Watanabe. “In this case, the plan failed to implement corrective actions to resolve identified deficiencies throughout the plan’s operations, including the handling of member complaints. When health plans don’t handle complaints correctly or in a timely manner, it delays the members’ access to medically necessary care and makes it harder for members to appeal health plan decisions.”
HEALTH PLAN MEMBER PROTECTIONS: California law requires health plans to have a grievance and appeal system to timely review, resolve and respond to member complaints in an appropriate manner. Through the grievance system, health plans inform members of their grievance and appeal rights and protections under the law, including the right to file a complaint with the DMHC if they are dissatisfied with the plan’s decision, and information on how to pursue an Independent Medical Review (IMR) if care is denied, delayed or modified.
Health plans must acknowledge receipt of a standard complaint within five days and resolve the issue within 30 days. For urgent issues, plans are required to immediately inform members of their right to contact the DMHC and resolve the complaint within three days. Health plan members have the right to appeal to the DMHC if they do not agree with their health plan’s resolution of their complaint.
BACKGROUND: The DMHC conducted a routine medical survey of Blue Cross which identified a number of deficiencies, including issues with the plan’s grievance system. The Department conducted a follow-up review which concluded not all the identified deficiencies were corrected. The deficiencies included failing to provide timely notice of the disposition or pending status of expedited complaints and failing to provide plan members with timely notice of their right to request an expedited review from the DMHC for urgent issues. The plan also failed to provide, in letters to members, a clear and concise explanation for the plan’s decisions to deny provider requests for services.
Blue Cross has agreed to pay the fine and implement corrective actions to address all remaining deficiencies, including staff training and making changes to its policies and procedures.
WHAT MEMBERS NEED TO KNOW: The DMHC encourages health plan members experiencing issues with their health plan, including denials, delays or modifications of requested health care services, to file a complaint 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 address the grievance for non-urgent issues, the DMHC Help Center can work with the member and health plan to resolve the issue. If a health plan member is experiencing an urgent issue, they should contact the DMHC Help Center immediately at www.DMHC.ca.gov or call 1-888-466-2219.
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About DMHC:
The DMHC protects the health care rights of more than 29.8 million Californians and ensures a stable health care delivery system. The DMHC Help Center has assisted approximately 2.9 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 www.DMHC.ca.gov or call 1-888-466-2219.