Health insurers now face steep fines for outdated physician directories

Currently, health insurers' Medicare physician directories that inaccurately include non-Medicare providers are merely an inconvenience for consumers. However, beginning in 2016, insurers can incur costly fines for such mistakes, according to The Wall Street Journal.

Critics say insurance providers' directories frequently include the names of physicians who have died, moved away, retired, changed affiliations, don't accept certain insurance plans or aren't seeing new patients, according to the report.

Now, new regulations enable CMS to fine insurers up to $25,000 per Medicare beneficiary for errors in Medicare Advantage plan directories and up to $100 per beneficiary for mistakes in plans sold on HealthCare.gov, according to the report.

Individual states are imposing their own rules and sanctions for such errors. For instance, in November, California fined Anthem Blue Cross $250,000 and Blue Shield of California $350,000 after a survey found more than a quarter of the physicians listed in their 2014 state directories did not accept Medicare plans or were not located at their listed address, according to the report.

A Blue Shield spokesman told WSJ it paid more than $38 million in claims adjustments over the previous two years, partially to cover unexpected out-of-network bills, while an Anthem spokeswoman said it invested $4 million in the same timeframe to increase the accuracy of its California directories.

Consumer advocates are also taking action against the error-ridden directories. In California, Consumer Watchdog has filed lawsuits against four insurers, alleging "significant misrepresentations" in their provider networks that resulted in costly out-of-network bills for patients, according to the report.

Insurance companies say it is physicians' responsibilities to update the health plan providers of any changes. However, with new penalties on the horizon, many carriers are clambering to update their directories. They are also advising their beneficiaries to ask physicians if they are in-network instead of solely relying on the directories, according to the report.

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