Underscoring a persistent complaint about Obamacare coverage, a California regulator found that two major health insurers violated state law and significantly overstated the availability of doctors on their new health-law policies.
More than 25% of physicians listed by Anthem Blue Cross and Blue Shield of California were not taking Covered California patients or they were no longer at the location listed by the companies, according to state reports released Tuesday.
The results of the five-month investigation come just as the second year of open enrollment begins and more than 1.2 million Californians are shopping in the state's insurance exchange.
"We found the provider directories made available to the public had significant errors," Shelley Rouillard, director of the California Department of Managed Health Care, said in an interview.
"When you have a quarter or more of physicians that aren't available that is significant," she said.
Anthem and Blue Shield account for nearly 60% of enrollment in Covered California. The two industry stalwarts have long catered to patients wanting the widest selection of physicians.
As a result, their narrower networks and more restrictive policies surprised many people. The insurers compounded the problem with inaccurate provider lists, mislabeled insurance cards and false assurances about coverage, according to patients, doctors and regulators.
That led to unforeseen medical bills in some cases when patients unwittingly ventured out of network for medical tests or a surgery.
The Department of Managed Health Care hasn't determined yet what penalties, if any, will be imposed on the insurance companies. The state intends to do a follow-up survey in six months to check whether problems have been corrected and the insurers are complying with the law.
The stakes are high for Anthem and Blue Shield as they vie for new members during the current three-month open enrollment period. The companies are also defending themselves against consumer lawsuits related to inaccuracies in the networks.
Both Anthem and Blue Shield disputed the state's findings and called regulators' survey methods deeply flawed. The insurers added that physicians and their office staff bear some blame for giving patients the wrong information at times.
"The department's report exaggerates the severity of the issues and understates the extent of our corrections," said Blue Shield spokesman Steve Shivinsky. "We have taken substantial steps to address the confusion."
Anthem said there's no evidence that patients are having widespread problems finding a primary-care doctor or specialist.
Anthem is a unit of industry giant WellPoint Inc. Blue Shield is a nonprofit health plan based in San Francisco.
State regulators hired an outside firm to check the accuracy of each insurer's online directory as of mid-June by calling a sample of physicians listed for individual coverage.
For Anthem, the state determined that 12.8% of doctors listed as in-network providers in the exchange were not willing to accept Covered California patients. Another 12.5% were no longer at the location listed in Anthem's directory.
In examining Blue Shield, the state found that 8.8% of doctors listed were not honoring exchange coverage and 18.2% were not at the location listed by the insurer.
State regulators acknowledged that both companies have taken steps to improve the accuracy of their provider directories and clear up confusion among doctors.
Physician groups welcomed the tougher government scrutiny. They also dismissed the criticism from the health plans and said the companies had a responsibility to better communicate with medical staffs.
"I think this state audit could be a game changer because this is the most comprehensive direct testing of the networks," said Brett Johnson, associate director for policy at the California Medical Assn.
"We definitely hope it will have a deterrent effect on the health plans," he said.