California health plan fined $55M for care authorization delays

L.A. Care, a publicly operated health plan in California with 2.5 million members, was fined $55 million for failing to authorize members' needed care, ensure timely access to care and address patient complaints, according to The Los Angeles Times.

The fine, the largest such penalty in the state's history, was levied March 4 by the California Department of Managed Health Care and the Department of Health Care Services.

While patients covered by L.A. Care have access to some private physicians, many rely on getting care through the county-owned safety-net hospital, as they are low-income.

The fine to L.A. Care came after a 2020 LA Times investigation that found many of the health plan's members faced large and sometimes deadly delays to see specialists. Specifically, the investigation found that patients who needed specialty care after a referral from their primary physician had to wait 89 days for approval, instead of the required 15-day limit. 

The state agencies said their investigation was prompted by the LA Times report. The state's investigation found several instances where care was delayed, including one case where a cancer patient was left without treatment despite deteriorating health and another case where a cancer patient who was given only six to nine months to live left L.A. Care for another insurer because of the delays.

The state regulators also found that L.A. Care had a backlog of 67,000 formal grievances that had not been resolved. 

"The scope and breadth of its violations indicate deep-rooted, systemic failures that threaten the health and safety of its members," Michelle Baass, director of the California Department of Health Care Services, told the LA Times

L.A. Care said it has taken corrective actions in response to the findings, but called the fines "unreasonable and not based on facts," according to the LA Times

"What the state does not seem to factor into their equation is that a financial penalty of this magnitude creates yet another financial hurdle for a public health plan that is a crucial part of the health care safety net in Los Angeles County," the statement from L.A. Care reads. 

Read more here.

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