California’s health care watchdog just sent a loud message out of Sacramento, hitting Blue Cross of California, doing business as Anthem Blue Cross, with a $15 million fine after a routine audit found what regulators describe as widespread, long-running failures in how the insurer handles member complaints. The action also orders Anthem to work with an independent auditor for up to four years to track fixes and report back. Department of Managed Health Care (DMHC) Director Mary Watanabe said the problems go back more than 15 years and were serious enough to trigger formal enforcement.
In a press release, the Department of Managed Health Care said the penalty and outside oversight follow a routine medical survey that uncovered multiple repeat deficiencies in Anthem’s grievance and appeals operations, which were then referred to the agency’s Office of Enforcement. The Department of Managed Health Care said the independent auditor will report Anthem’s corrective steps, and how well they work, directly to the state regulator.
An Anthem Blue Cross spokesperson told Fox40 that the company “takes member concerns seriously” and has already put corrective actions in place, including staff training and process changes, to address issues identified by regulators. Fox40 reporter Brett Stover noted that Friday’s announcement comes on the heels of a string of recent enforcement actions against the insurer.
What the audit found
The survey, which the DMHC said identified eight Grievances and Appeals deficiencies, found Anthem failed to ensure that oral expressions of dissatisfaction were treated as grievances, did not consistently identify grievances in nearly half of the files reviewed, and did not adequately consider or resolve exempt grievances in about 65% of reviewed cases. The Department also cited operational breakdowns that led to thousands of late or missing grievance-acknowledgment letters and said those repeat failures violated state rules requiring grievance and appeal systems to work reliably for members. The Department of Managed Health Care said the findings were serious enough to justify both a substantial financial penalty and several years of independent oversight.
Years of enforcement and context
The DMHC’s release outlines a long history of prior enforcement against Anthem for similar issues, including a $3.5 million penalty in December 2024 and a $500,000 action in November 2024, along with earlier fines dating back to 2019 and 2009. Regulators said Anthem had been ordered to take corrective action after those penalties, but many of the same problems persisted, leading to the much larger fine and the auditor requirement announced Friday.
What members should do
The DMHC advises health plan members who experience denials, delays, or changes to requested care to first file a grievance with their plan and, if the response is unsatisfactory or takes more than 30 days, to contact the DMHC Help Center at 1-888-466-2219 or through the agency’s website. Members with urgent problems can reach out to the Help Center right away for help, and the enforcement action is aimed at making sure those grievance channels function reliably so people can access timely care.
For Anthem Blue Cross members, the $15 million fine and multi-year auditor oversight signal that the state is escalating consequences after years of repeated corrective orders. State officials say the move reflects a willingness to apply sustained pressure to force systemic fixes in how health plans handle member complaints.
