California fines Molina $1M for slow provider payments

The California Department of Managed Health Care fined Molina Healthcare of California $1 million for failure to quickly pay $80.3 million to providers.

The payer has already paid the fine, the interest of $1.8 million and the original total owed to the providers, according to a June 17 news release.

The payment delays stemmed from software updates to Molina's data management systems in 2017, which was done to improve efficiency, according to The Sacramento Bee. When the company realized there was a problem, providers had been waiting 45 business days to resolve 29,124 disputes that started between September 2017 and September 2018. 

California law requires health plans to identify and acknowledge electronic provider disputes within two working days and within 15 working days for paper provider disputes. Health plans must also resolve each dispute or explain why it happened and how they will fix it within 45 working days.

"Molina's systemic failures to timely resolve provider disputes caused payment delays, potentially jeopardizing the financial stability of providers," DMHC Director Mary Watanabe said. "The plan has agreed to take corrective actions including remediating payments to impacted providers plus interest." 

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