{"id":1128,"date":"2026-04-13T19:30:17","date_gmt":"2026-04-13T19:30:17","guid":{"rendered":"https:\/\/sites.sandiego.edu\/cpil-blog\/?p=1128"},"modified":"2026-04-13T19:30:17","modified_gmt":"2026-04-13T19:30:17","slug":"dmhc-fines-blue-cross-15-million-and-assigns-third-party-monitor","status":"publish","type":"post","link":"https:\/\/sites.sandiego.edu\/cpil-blog\/2026\/04\/13\/dmhc-fines-blue-cross-15-million-and-assigns-third-party-monitor\/","title":{"rendered":"DMHC Fines Blue Cross $15 Million and Assigns Third Party Monitor"},"content":{"rendered":"<h3>By Taylor Neu<\/h3>\n<p>On January 2, 2026, the Department of Managed Health care (\u201cDMHC\u201d or \u201cthe Department\u201d) issued a <a href=\"https:\/\/perma.cc\/Z498-6CUH\">letter of agreement<\/a> with Blue Cross Blue Shield (\u201cBlue Cross\u201d) for violations of the Knox-Keene Health Care Service Plan Act of 1975 (\u201cthe act\u201d or \u201cKnox-Keene Act\u201d). These deficiencies violated\u00a0 Health and Safety Code section 1380, (i)(1), which requires Blue Cross correct deficiencies in a timely manner, and\u00a0 Health &amp; Safety Code section 1368 (a)(1), which requires Blue Cross to ensure any written or oral expression of dissatisfaction with their insurance plans to be considered a grievance and that Blue Cross adequately rectify those grievances. Collectively these deficiencies reflected systemic barriers to members\u2019 access to information, fair grievance handling, and quality oversight.<em> [see <a href=\"https:\/\/digital.sandiego.edu\/cgi\/viewcontent.cgi?article=3260&amp;context=crlr\">31:1 CRLR 52<\/a>]<\/em><\/p>\n<p>In DMHC\u2019s <a href=\"https:\/\/perma.cc\/V4JC-YUQ9\">final report<\/a> issued on March 20th 2025, the Department found nineteen deficiencies with Blue Cross insurance plans. These deficiencies included failures to correctly identify grievances in nearly half of DMHC reviews. These failures to identify grievances include failing to count oral expressions of dissatisfaction such as telephone calls by enrollees to dispute bills, and calls complaining about an inability to find particular specialists such as rheumatologists. Per the letter of agreement, these delays in the grievance process delayed patients&#8217; access to critical treatments like chemotherapy. As a result of Blue Cross&#8217;s flawed grievance system, DMHC and Blue Cross signed an agreement for Blue Cross to improve their grievance process through a Corrective Action Plan (CAP) over three years. As part of the agreement, Blue Cross became subject to a 15 million dollar fine, almost double the value of all previous major fines.<\/p>\n<p>In addition to the fine, DMHC and Blue Cross have agreed to an additional CAP to improve Blue Cross\u2019s grievance process. First, the CAP gives Blue Cross a list of metrics on how grievances are evaluated as Blue Cross continues to improve its grievance systems.\u00a0 Second, the CAP requires an independent audit monitor, Freed Associates, to monitor the Blue Cross grievance process and report Blue Cross successes and failures to DMHC. To monitor Blue Cross, Freed Associates will have access to Blue Cross\u2019s data, records, systems, and employees. Third, Freed Associates will issue recommendations on how to improve Blue Cross\u2019 grievance process; if Blue Cross disagrees with Freed Associates\u2019 recommendations, Blue Cross may speak with the DMHC to propose an alternative plan to improve the grievance process with DMHC\u2019s approval. Fourth, the CAP mandates Free Associates provide continued reports of Blue Cross\u2019 progress on its grievance system to DMHC twice a year between 2026 and the end of 2029, with reports due on February 1 and August 1 of each year.<\/p>\n<p>In light of these issues, DMHC encourages Californians insured by Blue Cross to contact DMHC and file a complaint if Blue Cross takes longer than 30 days to respond to a grievance in their healthcare plans, or if plan members disagree with Blue Cross ultimate response to a grievance.\u00a0 DMHC has options to assist consumers by <a href=\"https:\/\/www.dmhc.ca.gov\/FileaComplaint\/\">filing a complaint online<\/a>, calling the Department Help Center at 1-888-466-2219 to report issues, or applying for an Independent Medical Review to have an independent medical professional review your insurance request.<\/p>\n<a class=\"synved-social-button synved-social-button-follow synved-social-size-32 synved-social-resolution-single synved-social-provider-facebook nolightbox\" data-provider=\"facebook\" target=\"_blank\" rel=\"nofollow\" title=\"Follow us on Facebook\" href=\"https:\/\/www.facebook.com\/CPILUSD\" style=\"font-size: 0px;width:32px;height:32px;margin:0;margin-bottom:5px;margin-right:5px\"><img loading=\"lazy\" decoding=\"async\" alt=\"Facebook\" title=\"Follow us on Facebook\" class=\"synved-share-image synved-social-image synved-social-image-follow\" width=\"32\" height=\"32\" style=\"display: inline;width:32px;height:32px;margin: 0;padding: 0;border: none;box-shadow: none\" src=\"https:\/\/sites.sandiego.edu\/cpil-blog\/wp-content\/plugins\/social-media-feather\/synved-social\/addons\/extra-icons\/image\/social\/circle\/64x64\/facebook.png\" \/><\/a><a class=\"synved-social-button synved-social-button-follow synved-social-size-32 synved-social-resolution-single synved-social-provider-twitter nolightbox\" data-provider=\"twitter\" target=\"_blank\" rel=\"nofollow\" title=\"Follow us on Twitter\" href=\"https:\/\/twitter.com\/cpilusd\" style=\"font-size: 0px;width:32px;height:32px;margin:0;margin-bottom:5px\"><img loading=\"lazy\" decoding=\"async\" alt=\"twitter\" title=\"Follow us on Twitter\" class=\"synved-share-image synved-social-image synved-social-image-follow\" width=\"32\" height=\"32\" style=\"display: inline;width:32px;height:32px;margin: 0;padding: 0;border: none;box-shadow: none\" src=\"https:\/\/sites.sandiego.edu\/cpil-blog\/wp-content\/plugins\/social-media-feather\/synved-social\/addons\/extra-icons\/image\/social\/circle\/64x64\/twitter.png\" \/><\/a>","protected":false},"excerpt":{"rendered":"<p>By Taylor Neu On January 2, 2026, the Department of Managed Health care (\u201cDMHC\u201d or \u201cthe Department\u201d) issued a letter of agreement with Blue Cross Blue Shield (\u201cBlue Cross\u201d) for violations of the Knox-Keene Health Care Service Plan Act of <a class=\"more-link\" href=\"https:\/\/sites.sandiego.edu\/cpil-blog\/2026\/04\/13\/dmhc-fines-blue-cross-15-million-and-assigns-third-party-monitor\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1013,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[133034,138204,132908,133032,138206,138420,138421],"coauthors":[138175],"class_list":["post-1128","post","type-post","status-publish","format-standard","hentry","tag-blue-cross","tag-blue-shield","tag-dmhc","tag-enforcement","tag-hmo","tag-insurance-plans","tag-ppo"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - 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