The California Hospital Association (“CHA”) filed a Complaint against Blue Cross of California d/b/a Anthem Blue Cross (“Anthem”), alleging that Anthem is violating California state law by failing to arrange timely access to post-acute care for its members after they are discharged from hospitals.
CHA alleges that Anthem caused “patients across California to languish in hospitals when they are ready for post-acute care” because Anthem “refuse[d] to arrange for and authorize that post-acute care,” leading patients to “remain in the hospital needing additional acute care, and hospitals are forced to continue providing that care.” CHA estimates that 4,500 patients remain in California hospitals and emergency rooms every day “despite being medically cleared for discharge,” though Anthem is not responsible for all of those patients’ wait times. Additionally, CHA estimates that hospitals provide an estimated 1,000,000 days of avoidable inpatient care and 7,500,000 hours of avoidable ER care due to discharge failures by health plans. This leads to “at least $3.25 billion in avoidable hospital costs every year.”
The lawsuit further notes that delays in post-acute care make it harder for patients to recover; they increase health care costs for patients and hospitals; and they strain hospital capacity, given scarce staffing resources. CHA alleges that the strain is increased when health plans (like Anthem) deny authorization and payment when the hospital has continued providing care to these patients despite the plan’s legal obligation not to discontinue hospital care until the plan has arranged for and authorized post-acute care.
CHA alleges that these practices are in violation of the Knox-Keene Act as under the Act, Anthem is required to “ensure that all plan and provider processes necessary to obtain covered health care services, including, but not limited to, prior authorization processes, are completed in a manner that assures the provision of covered health care services to an enrollee in a timely manner appropriate for the enrollee’s condition and in compliance with this section.”
CHA further notes that the Act states that Anthem cannot “discontinue ongoing hospital acute care for a patient until the health plan has both notified the treating provider of its decision and a care plan has been agreed upon for the patient.” This means that in instances where Anthem “unilaterally discontinue[s] authorization for ongoing acute care before there is an agreement between Anthem and the treating provider for post-acute care, Anthem is in violation of the Knox-Keene Act.
CHA is seeking an injunction against Anthem to prevent the insurer from engaging in these practices as well as restitution of CHA’s costs “incurred in combatting Anthem’s unlawful and unfair practices” outlined in the Complaint.