Covered California slapped Blue Shield of California (pdf) and Anthem Blue Cross (pdf), the exchange’s two top insurers, across the wrists and fined them a combined $600,000 for failing to provide one of the central resources for any marketplace to be successful, especially one providing health care.

“An important element of access is ensuring enrollees have accurate provider directories,” California’s Department of Managed Health Care (DMHC) Director Shelley Rouillard said in a statement (pdf) announcing the penalties.

That is correct. When it comes to receiving adequate health care, it helps to be able to find a doctor or hospital and know that they are actually in your network so you don’t get gouged on the price.

But that hasn’t happened yet, and there isn’t a lot of assurance that it is going to anytime soon.

The DMHC fines were a result of its five-month survey, ending in May 2014, of how well Blue Shield and Anthem were serving the public. The Blue Shield survey (pdf) found 18% of the 1,360 doctors called weren’t at the number listed by the insurance company and 8.8% said they weren’t really part of the Covered California network.

The Anthem survey (pdf) found 12.5% of the 3,272 doctors called weren’t at the number listed and 12.8% denied they were in the network. Even with follow-up phone calls, surveyors found that, overall, just 56.7% of the doctors listed by Blue Shield and 58.7% by Anthem were available to Covered California members.

Both companies disputed the findings. Blue Shield spokesperson Steve Shivinsky told the Los Angeles Times last November, “The department’s report exaggerates the severity of the issues and understates the extent of our corrections.” Anthem said its providers have no ethical responsibilities to answer surveys, nor are they paid to do that, so the results are meaningless.

Blue Shield was fined $350,000 and Anthem $250,000. Blue Shield has refunded $38 million to customers hit with unexpected out-of-network charges and Anthem is still toting up the bill. There is no indication what percentage of people affected actually received reimbursement.

Covered California launched in October 2013 and immediately encountered problems with its website’s accuracy in the physician directory for participating insurance companies. So they took it down. Then they put it back up with great fanfare in January 2014 and immediately took it down again for the same reason with little intention of trying again.

The insurance companies posted their own directories, but they were riddled with errors and caused thousands of people to inadvertently incur medical expenses outside their network at great cost. Covered California networks appeared to be much larger than they were—size was a selling point—and turned out to be considerably smaller than the companies’ regular networks.

Lawsuits ensued and some are still being litigated.

Last month, Governor Brown signed Senate Bill 137, which requires insurance companies to provide accurate directories of doctors and hospitals participating in the exchange. The new law requires the DMHC and the Department of Insurance to develop uniform standards for directories and weekly updates by next July.

The bill was opposed by the California Association of Physicians Groups and some providers who, according to the Sacramento Business Journal, think the timeline is unrealistic.

–Ken Broder

To Learn More:

Why Blue Shield and Anthem Blue Cross May Owe You Money (by Kathy Robertson, Sacramento Business Journal)

Anthem, Blue Shield Fined $650,000 for Faulty Doctor Directories (by Claudia Buck, Sacramento Bee)

California Fines Top Health Insurers for Overstating Obamacare Networks (by Chad Terhune, Los Angeles Times)

California Decides Accurate Health Provider Directories Might Be a Good Idea (by Ken Broder, AllGov California)

Covered California Survey Finds Nearly Half of Blue Shield/Anthem MDs Are MIA (by Ken Broder, AllGov California)

DMHC Fines Blue Shield and Anthem for Inaccurate Provider Directories (Department of Managed Health Care) (pdf)