On November 3, the California Department of Managed Health Care (DMHC) announced it had fined two of the state's largest health plans for inaccurate Covered California provider directories. Blue Shield of California was fined $350,000, while Anthem Blue Cross was fined $250,000.

These two insurers account for almost 60 percent of patient enrollment in Covered California. Both insurers are also utilizing networks for their exchange/mirror products that are significantly narrower than their regular PPO networks. These narrowed networks, combined with inaccurate provider directories, have led to significant confusion and frustration for both physicians and patients.

DMHC has directed both plans to improve the accuracy of their provider directories and to also reimburse enrollees who may have been negatively impacted. Blue Shield has already reimbursed more than $38 million to enrollees who incurred out-of-network costs.

The fines were the result of a five-month investigation of the Anthem and Blue Shield Covered California networks, which found that more than 25 percent of physicians listed as participating in the plans’ directories were not taking these patients or they were no longer at the location listed by the companies.

The audit also found that in both cases, auditors were unable to confirm Covered California participation status for more than 40 percent of physicians listed as participating in the plans’ directories – after three separate attempts to contact them using information in the directory. This hindrance to accessibility for such a substantial portion of listed physicians is a violation of state law, DMHC said in its report.

According to the DMHC audit, only 58.7 percent of the physicians listed in Anthem's Covered California directory could be verified as accepting Covered California patients, which is consistent with previous California Medical Association surveys of physicians listed as participating in Covered California. DMHC found that 12.8 percent of physicians listed by Anthem were not accepting Covered California patients, while 12.5 percent were not in practice at the location listed in Anthem’s directory.

DMHC has initiated a follow-up survey to determine if the plans have corrected the deficiencies identified in the initial survey reports.

You can read the Blue Shield agreement here, and the Anthem agreement here.