Tuesday, June 23, 2026
The DMHC fines Blue Shield of California $300,000 for denying payments for newborn care
WHAT YOU NEED TO KNOW:
- Blue Shield of California wrongfully denied payments for care provided to newborns covered by the parents’ health plan policies.
- California provides some of the most robust health care protections in the country including automatic coverage for newborns under the parents’ health plan policy.
- Health plan members have the right to appeal health plan denials and can come to the DMHC Help Center for assistance.
SACRAMENTO - The Department of Managed Health Care (DMHC) fined California Physicians’ Service (Blue Shield of California) $300,000 for wrongfully denying payments for newborn care in two separate cases. In addition, the Department found the plan did not properly address and resolve member complaints, also known as grievances or appeals, related to the payment denials.
“Welcoming a new baby should be a joyful time, not one made more stressful by a health plan’s refusal to pay for newborn care that should be covered,” said DMHC Director Mary Watanabe. “In two separate cases, Blue Shield of California wrongly denied payments for newborn care and failed to correct the errors despite repeated complaints by the plan’s members.”
PROTECTIONS FOR HEALTH PLAN MEMBERS: Most health plans are required to cover newborn care under the parents’ health care policy, with certain time limits around when new parents must enroll their newborn for coverage in their health plan. Having a baby is a qualifying life event that provides a special enrollment period to enroll in health coverage.
In addition, California law requires health plans to have a system in place to review, resolve and respond to member complaints, also called grievances or appeals, within 30 days. Health plans must also inform members of their grievance and appeal rights and protections under the law, including the right to file a complaint with the DMHC if they are dissatisfied with the plan’s decision.
BACKGROUND: The DMHC Help Center received two separate complaints related to newborn care payment denials for members enrolled in Blue Shield of California plans. In both cases, the plan denied payment for the care provided to the newborns and failed to follow the law and coverage requirements specified in the members’ Evidences of Coverage.
More information on each case can be found in the Letters of Agreement:
- DMHC Enforcement Matter Number: 23-165
- DMHC Enforcement Matter Number: 23-200
WHAT MEMBERS NEED TO KNOW: The DMHC encourages health plan members experiencing issues with their health plan, including denials of payment for covered health care services, to file a complaint with their health plan. If the member does not agree with their health plan's response or the plan takes more than 30 days to respond to the complaint, the member can contact the DMHC Help Center. If a health plan member is experiencing an urgent issue, they can contact the DMHC Help Center immediately. Health plan members can file a complaint with the DMHC Help Center at www.DMHC.ca.gov or by calling 1-888-466-2219.
MORE INFORMATION: More information about Blue Shield of California can be found on the health plan dashboard on the DMHC website, including information on the plan’s service area, enrollment and complaints.
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About DMHC
The mission of the DMHC is to ensure health plan members have access to equitable, high-quality, timely, and affordable health care within a stable health care delivery system. The DMHC accomplishes this important mission by regulating health plans, enforcing California’s strong consumer protection laws and assisting health plan members. For more information visit www.DMHC.ca.gov.