Thursday, May 22, 2025
DMHC Fines Blue Shield of California $300,000 for Mishandling Claims Payments for Medical Care
(Sacramento) – The California Department of Managed Health Care (DMHC) fined California Physicians’ Service (Blue Shield of California) $300,000 for mishandling several claims payments, delaying reimbursement payments to a plan member for approved medical care over a five-year period.
“Health plan members have rights, and are protected under some of the strongest patient protection laws in the country,” said DMHC Director Mary Watanabe. “The DMHC will continue to protect health plan members’ rights, just like in this case where the member came to the DMHC Help Center because Blue Shield of California mishandled dozens of payments for medical care. I encourage plan members to file a complaint, and reach out to the DMHC Help Center, if they are having problems getting care or facing billing or payment issues with their health plan.”
FILING A COMPLAINT: The DMHC encourages health plan members experiencing problems with their health plan, including billing and copay disputes, denials of claims, or delays in finding an in-network doctor or provider, to file a complaint, also called an appeal or grievance, 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 resolve the grievance, the member should contact the DMHC Help Center. If a health plan member is experiencing an urgent issue, they should contact the DMHC Help Center immediately.
BACKGROUND: Blue Shield of California approved a health plan member’s request for speech and occupational therapy from an out-of-network provider at the in-network rate. The plan then denied or mishandled payments for 36 claims connected to the delivery of these services from 2020 through 2024, incorrectly denying or reimbursing incorrect amounts to the member for the approved medical services for years. As a result, the member’s parent filed 10 separate complaints with the DMHC Help Center. In addition to resolving the complaints, the DMHC Help Center referred this matter to the Department’s Office of Enforcement for further investigation.
Blue Shield of California paid the $300,000 fine and completed corrective actions to improve claims processing, including educating its staff on therapy authorizations and improving the documentation of claims.
WHAT MEMBERS NEED TO KNOW: Health plan members having trouble getting the care they need, should first file a grievance, sometimes called an 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 in non-urgent cases, 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 at www.DMHC.ca.gov or by calling 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.