Anthem pays California hospitals $1.6 million in claims dispute

The settlement says claims were denied due to varying deadlines and confusion about separate submission addresses.

By Emily Berry — Posted Dec. 2, 2010

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Anthem Blue Cross of California has agreed to pay hospitals previously denied claims as part of a settlement over a system that hospitals complained about to the state's Dept. of Managed Health Care.

Hospitals typically are first paid to care for Anthem enrollees under a daily, or per-diem rate, and then after the bill reaches a certain amount -- what's called a "stop-loss" payment.

Anthem processed the two types of claims at different addresses and under different deadlines since at least 2004, according to the agreement.

The agreement said that when Anthem received claims for stop-loss payments at the per-diem claims address, it did not forward those claims, but rejected them as if they were erroneous claims for per-diem payment.

The DMHC alleges that an undisclosed number of hospitals lost "sizable" stop-loss payments because of Anthem's system.

Anthem did not admit any wrongdoing, but the agreement said the company had invested in new claim processing systems and retrained its claims processing staff.

The agreement, dated Oct. 26, calls for Anthem to pay hospitals for the disputed stop-loss payments, plus interest, equal to more than $1.6 million, and to pay $2,264 in interest on a disputed claim it had paid one hospital without interest.

"We were pleased to resolve our disagreement with the Dept. of Managed Health Care through a consent agreement, rather than litigation," an Anthem company statement said. "The complaints at issue were generally four to six years old, and Anthem had since adopted processes to simplify stop-loss claim submission for contracted hospitals."

Anthem and its parent company, Indianapolis-based WellPoint, last wrote out a large check to the DMHC in 2008, when it was among several companies that agreed to settle a state investigation of its rescission practices. WellPoint paid $10 million, but it did not admit any wrongdoing. A lawsuit brought against WellPoint by the City of Los Angeles over the insurer's alleged rescission practices is pending.

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