Molina Healthcare Slapped with Large Fine for Lapses In Handling Grievances

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A California regulator has imposed a six-figure fine on Molina Healthcare for significant lapses in the insurer’s grievance process for enrollees.

It’s the third large fine imposed on Molina related to its handling of enrollee grievances since 2015.

Molina, which is based in Long Beach and has enrollment of about 630,000 statewide, is one of the largest Medicaid managed care and Children’s Health Insurance Plan companies in the United States.

It also provides Medicare coverage and sells individual policies through the Covered California health insurance exchange.

The Department of Managed Health Care imposed two separate administrative penalties on Molina and fines of $65,000 and $152,500 on Dec. 4, records show, for a total of $217,500.

Altogether, the regulator found 44 instances where Molina violated state statutes and regulations. They included 13 incidents where an enrollee’s grievance was not adequately considered, investigated and rectified, a violation of California’s Health and Safety Code.

“The gravity of (Molina’s) violations is measured by the fact that even one grievance violation deprives an enrollee of…consumer protections that ensures an enrollee’s access to quality medical care,” the DMHC said in its correspondence with Molina.

DMHC spokesperson Ashley Robinson said that the penalties and fines were the result of complaints forwarded to the regulator through its consumer help center. The complaints were comprised of both Molina’s Medi-Cal managed care and commercial plans, she added.*

Molina also agreed to an unusually extensive corrective action plan to resolve the issues.

The plan, which ran two full pages, included training the company’s member service representatives on the definition and resolution of a grievance; how to properly document a grievance; how to properly audit its grievance process; and how to identify if an enrollee has filed multiple grievances.

It also agreed to conduct ongoing audits of its grievance department.

Molina spokersperson Laura Murray declined to comment on the DMHC actions.

The insurer received two other six-figure fines in recent years, both for grievance-related issues, records show.

Last July, the DMHC fined Molina $100,000 for failing to assist an enrollee with an emergency room claim involving a hospital in Maine. The enrollee, who was being balanced billed nearly $1,800 in violation of California law, made repeated phone calls to Molina to complain.

Molina rejected the enrollee’s complaints and suggest instead that the enrollee enter into a payment plan with the hospital, records show.

In 2015, Molina was fined $500,000 by the regulator as the result of a non-routine survey that occurred the prior year. It concluded that Molina’s grievance system lacked safeguards ensuring any complaints related to medical necessity were being fairly resolved; didn’t maintain an appeals process that provided timely communications to enrollees; and also found numerous flaws in utilization review system. Molina agreed to pay half of the fine, with the remainder stayed so long as it resolved the issues.

Carmen Balber, executive director of Los Angeles-based Consumer Watchdog, noted in an email that “Molina had the worst record of the top eight insurers when it came to having its medical necessity decisions overturned by the DMHC.”

Although Molina began in Long Beach serving low-income residents of the region, it has capitalized on the expansion of Medicaid eligibility as a result of the passage of the Affordable Care Act in 2010. It now operates in 15 states with a nationwide enrollment of 4 million. Through the third quarter of 2018 it reported net income of $506 million on revenue of $14.2 billion.

*The story has been updated. The original version stated that the complaints were comprised of both Molina’s Medi-Cal managed care and Medicare plans.

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