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Maine Bureau of Insurance
Docket No. INS 03-420

TO: Anthem Health Plans of Maine, Inc. (Anthem)

Re: Failure to comply with the requirements of Insurance Rule Chapter 850

Dear Compliance Officer:

Please accept this as a formal Letter of Reprimand from the Superintendent of the Maine Bureau of Insurance. The purpose of the letter is to address Anthem’s failure to comply with the requirements of Insurance Rule Chapter 850 in administering its appeals process for mental health services provided through Green Spring of Maine, Inc.

FACTS

1. Anthem, and its predecessor, has been a Maine insurer licensed to sell health insurance, license # LHD 70566, since 1938. Green Spring of Maine, Inc. (Green Spring) is a licensed utilization review entity, license # URF33660. During 2002 and 2003, Green Spring was under contract with Anthem to conduct utilization review and handle first level utilization review appeals for mental health services. Anthem was legally responsible for the actions of Green Spring described below.

2. An Anthem enrollee filed a complaint with the Bureau, complaint # 2003-12452, regarding Anthem’s retrospective denial of three days of an inpatient hospital stay.

3. On October 30, 2002, [Enrollee's health care provider] sent a letter to Green Spring appealing the retrospective denial of Enrollee's inpatient stay.

4. On November 14, 2002, Green Spring sent a letter to Enrollee advising her of her right to a first level appeal, stating in part:

“Green Spring of Maine has been authorized by Anthem Blue Cross and Blue Shield to administer its Managed Care Mental Health Program. A retrospective medical record review has been conducted by Green Spring of Maine on the above-named patient. This review was conducted by a Green Spring physician advisor and resulted in our inability to certify as medically necessary the following days, based upon Green Spring of Maine inpatient criteria. The clinical reason for this decision and the medical necessity criteria are enclosed… Once a first level appeal has been accomplished, a second level of appeal through Anthem Blue Cross & Blue Shield within 90 days of the first appeal."

5. On December 3, 2002 and December 5, 2002, Enrollee’s parents sent letters to Green Spring requesting a first level appeal addressing the medical necessity of the inpatient care.

6. On December 13, 2002 Green Spring sent Enrollee a letter stating in part:

“Green Spring of Maine has been authorized by Anthem Blue Cross and Blue Shield to administer their Managed Care Mental Health Program. We recently conducted a second opinion review of inpatient treatment for the above-named patient. This letter confirms the conversation with [Physician's name omitted] our Physician Advisor, who indicated that this admission for inpatient care could not be certified as medically necessary based upon Green Spring of Maine inpatient criteria. The clinical reason for this decision and the medical necessity criteria are enclosed.

Please be advised that an appeal of this decision can be requested if the patient was admitted to the hospital. An appeal can be requested by the patient, the attending physician, or the facility verbally or in writing. A copy of the patient’s medical record must be sent to: Appeals Coordinator, Green Spring of Maine … within 60 days of this notification.”

7. Rule 850(8)(G) requires a carrier rendering a retrospective denial to offer the enrollee a first level appeal and issue a first level appeal decision. The first level adverse appeal decision must comply with the requirements of Rule 850(8)(G)(1)(c)(v), which provides:

v) The notice must advise of any subsequent appeal rights, and the procedure and time limitation for exercising those rights. Notice of external review rights must be provided to the enrollee as required by Title 24-A M.R.S.A. Section 4312(3). A description of the process for submitting a written request for second level grievance review pursuant to section 9(D) must include the rights specified in section 9(D)(3)(c).

Section 9(D)(3)( c ) provides:

c) A covered person has the right to:
i.) Attend the second level review;
ii) Present his or her case to the review panel;
iii) Submit supporting material both before and at the review meeting;
iv) Ask questions of any representative of the health carrier; and
v) Be assisted or represented by a person of his or her choice.

8. Green Spring’s December 13, 2002 letter to Enrollee was not intended to serve as a first level appeal decision and did not provide Enrollee with notice of her right to a second level appeal. In response to Enrollee's complaint, Anthem’s June 12, 2003 letter to the Bureau explained, in part: “Green Spring’s [appeals] process entitles the member to an initial determination and a second opinion prior to exhausting appeal rights. In order to allow the maximum number of reviews on this case, the appeal letter the member submitted to Green Spring on December 5, 2002 was considered to be a second opinion, and further stated the appeal rights.”

9. Anthem provided the Bureau with a copy of a letter to one of its contracted mental health hospitals dated July 8, 2003, demonstrating that Anthem began taking appropriate steps to address deficiencies in its mental health appeal and grievance process on its own initiative. That letter states in part:

“During our annual review of the Complaint and Appeal Policy, it was noted that our members, whose behavioral health services are managed by Green Spring, were allowed to exercise the second level process through both Green Spring and Anthem. In an effort to streamline and clarify the process, the responsibility for conducting the second level appeal will belong solely to Anthem.

With the implementation of this change, which will become effective August 1, 2003, requests for second level appeal reviews should be directed to Anthem as instructed in Green Spring’s first level determination letter.”

BUREAU FINDINGS

10. Anthem failed to provide Enrollee with a first level appeal decision meeting the requirements of Rule Chapter 850(8)(G), and failed to properly advise Enrollee of her second level appeal rights as required by 850(8)(G)(1)(c)(v). In mitigation, Anthem recognized that there were deficiencies in its mental health appeal procedures and took steps to bring its procedures into compliance with Rule Chapter 850.

RIGHT TO APPEAL

11. The Superintendent is the official charged with administering and enforcing Maine’s insurance laws and regulations. Title 24-A M.R.S.A. § 12-A provides that the Superintendent may issue a Letter of Reprimand to any licensee after providing an opportunity for a hearing. In accordance with 24-A M.R.S.A. §229(3), you have thirty (30) days from the time you receive this Letter of Reprimand to request a hearing. If a hearing is requested, the effective date of this Letter of Reprimand will be suspended pending the hearing. This Letter of Reprimand is a public record within the meaning of 1 M.R.S.A. § 402 and will be available for public inspection and copying as provided for by 1 M.R.S.A. § 408. It will be reported to the NAIC and included in the RIRS database.

Nothing herein shall prohibit the Superintendent from seeking additional sanctions in the event that additional violations are brought to the attention of the Bureau.

Dated: _______________________

_________________________________
ALESSANDRO A. IUPPA
Superintendent of Insurance

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