A significant California health insurer has been ordered to employ a dedicated case manager for individuals diagnosed with gender dysphoria following findings by state regulators that it had wrongly denied coverage to certain patients.
In a groundbreaking case, two of California’s largest health insurers have been slapped with record-breaking fines for their unlawful denial of coverage for gender-affirming care. This significant development will force these insurers to overhaul their policies and practices when it comes to patients diagnosed with gender dysphoria.
Blue Cross of California Partnership Plan and Anthem Blue Cross have been ordered to pay a total of $850,000 in penalties. In addition to the fines, the insurers are required to hire a dedicated case manager for individuals with gender dysphoria. The decision also mandates a review of over 150 cases where coverage for related procedures was denied. So far, most of these cases have been reversed.
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The insurers are adhering to the decision made by the Department of Managed Health Care, a state office responsible for regulating their industry.
Mike Bowman, a spokesperson for the insurance providers, stated in a response to CalMatters that they take these matters seriously and have collaborated with the Department of Managed Health Care to identify and implement necessary corrective actions to resolve the issues at hand.
Between 2017 and 2020, Anthem Blue Cross and its state partnership in California classified more than 20 surgeries, including facial implants, hair removal, voice therapy, and breast augmentation, as “not medically necessary.” However, these procedures were covered if they aimed to correct “abnormal” body structures in order to achieve a “normal appearance” for individuals transitioning to their desired gender.
According to an Aug. 15 ruling by Sonia R. Fernandes, deputy director and chief counsel office of enforcement at the Department of Managed Healthcare, the language used by the company could potentially cause confusion among reviewers regarding the medical necessity of the 22 procedures. The ruling was made against the Blue Cross of California Partnership Plan.
In another ruling targeting Anthem Blue Cross, Judge O’Connor emphasized that the company failed to offer any alternative guidelines to assist healthcare providers in determining when these procedures would be eligible for coverage. Specifically, the plan referred to these procedures as “cosmetic” if they were intended to enhance the gender-specific appearance of individuals who had already undergone or were considering sex reassignment surgery.
Years after the implementation of the Insurance Gender Nondiscrimination Act in 2013, which aimed to protect LGBTQ+ Californians from discrimination in health coverage, the contested plans were still in place. Blue Cross officials admitted that these plans did not comply with state law. However, the company and its affiliates have faced increasing criticism in the past year for their handling of gender-affirming care.
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California’s insurance regulators have previously taken action against forms of discrimination like this. In 2017, the department imposed a $200,000 fine on Health Net, an insurer, for failing to provide adequate coverage for gender reassignment surgery and other related procedures.
In December, the Department of Managed Health Care issued a $200,000 fine against California Physicians’ Service, also known as Blue Shield of California, the doctor reimbursement side of BlueCross.
An individual diagnosed with gender dysphoria had their health care coverage suspended, despite receiving prior-approved services from an out-of-network provider. The state requested corrective action, which the company took by paying the fine.
Regulators have insisted that insurance companies must go beyond a verbal agreement and provide written confirmation of their rule modifications. Furthermore, they must ensure that any additional denials adhere to state laws and provide proper training to doctors and healthcare administrators.
