Becker’s: L.A. Care reaches $55M settlement with California

Author: Rylee Wilson 

October 8, 2024

This article was originally published on Becker’s here.

L.A. Care will pay a $55 million penalty to resolve allegations the plan improperly denied claims, and had a backlog of unresolved grievances. 

In an Oct. 8 news release, the directors of the state’s Department of Managed Health Care and Department of Health Care Services said L.A. Care will be required to work with an outside consultant to monitor improvements to the plan’s operations, including claim authorizations, handling of member grievances and provider disputes.

Of the $55 million settlement, L.A. Care will pay $20 million to the Department of Health Care Services and $13 million to the Department of Managed Health Care. L.A. Care will contribute the remaining $28 million to community programs in Los Angeles County over the next three years. 

In an Oct. 8 news release, L.A. Care said it took issue with the original proposed fine amount, and filed an appeal to divert some of the proposed penalty to community investment. 

“Having the majority of the funds allocated toward community investments is a priority consistent with L.A. Care’s commitment to advancing health equity,” the insurer said. 

The $28 million will be on top of L.A. Care’s recurring annual investments in community programs, according to the news release. 

“L.A. Care appreciates DMHC and DHCS willingness to come to agreeable terms that further enhance our service to our communities and is proud of our efforts to provide high quality health care to L.A. County’s most vulnerable residents,” the insurer said. 

L.A. Care is the largest public health plan in the U.S., with over 2.5 million members in Los Angeles County. Most of the plan’s membership is in Medicaid managed care.