State health regulators announced Friday, March 4, they have fined L.A. Care, a health insurance plan for Los Angeles County’s neediest residents, $55 million for failing to ensure that patients have timely access to care, denying needed treatment and ignoring members’ complaints.
Although health plans are required to offer their members specialist appointments within 15 days, the average wait at L.A. County Department of Health Services facilities was 89 days following a referral from a primary care provider, according to an investigation by The Los Angeles Times.
The publicly operated health plan insures more than 2 million Medi-Cal patients and other low-income recipients. The fine is the largest such penalty in state history, outstripping the previous record fine of $10 million, according to The Times.
“The magnitude of L.A. Care’s violations, which has resulted in harm to its members, requires immediate action,” California Department of Managed Health Care Director Mary Watanabe and Department of Health Care Services Director Michelle Baass said in a joint statement. “Our investigations found several operational failures at L.A. Care, which have significantly impacted the health and safety of some of the state’s most vulnerable health care consumers. This action is necessary to protect the plan’s members, and to get L.A. Care to make serious changes to repair the plan’s operations.”
The two departments’ actions against the state’s largest Medi-Cal plan consists of a $35 million penalty from the DMHC and a $20 million sanction from the DHCS. Baass said that although L.A. Care cooperated with regulators’ investigation, “the scope and breadth of its violations indicate deep-rooted, systemic failures that threaten the health and safety of its members.”
Examples of harm to patients caused by authorization delays included a cancer patient’s health deteriorating, a plan member suffering extreme pain for over two weeks, and another cancer patient given a prognosis of six to nine months to live who left L.A. Care because of treatment delays, regulators said. The documented harm to the plan’s members demonstrate L.A. Care’s “failure to provide covered health care services in a timely manner,” authorities said.
In an emailed statement to The Times, L.A. Care officials acknowledged some of the deficiencies found by state regulators but said it took issue with the unprecedented fines, which it described as “unreasonable and not based on facts.” The backlog of grievances will be resolved this month and L.A. Care is working with the county Department of Health Services to bring them into “full compliance,” the statement read.
The statement described the fines as “arbitrary and unnecessarily punitive,” and said that L.A. Care will contest them, according to The Times.