‘Broken Partnerships’: Hospitals Sue Insurance Provider as Managed Care Plans Delay Discharge To Nursing Homes

The California Hospital Association (CHA) has taken legal action against Anthem Blue Cross, the largest health insurance company in the state, for its role in denying discharge from hospitals to nursing homes and other post-acute care settings.

According to reporting in The San Diego Union Tribune, the lawsuit alleges that Anthem’s prolonged approval processes for skilled nursing and other post-acute care placements are causing severe delays and financial burdens for health care providers and patients alike.

The outcome of this legal battle will likely have far-reaching implications for skilled nursing operators and health care providers across California, as they grapple with systemic challenges in patient discharge and post-acute care transitions.


The California Association of Health Facilities (CAHF), while not a part of the lawsuit, told Skilled Nursing News that the issues mentioned in the litigation are indicative of a pattern of challenges that CAHF’s members are experiencing with many of California’s managed care plans.

“As we have been communicating to the managed care plans and state regulatory authorities, challenges must be addressed before these broken partnerships have a detrimental effect on our most vulnerable populations,” Craig Cornett, CAHF CEO and president, said in an email.

Meanwhile, approximately 4,500 Californians are stuck in hospitals and emergency departments awaiting approval and arrangements for discharge, due to Anthem’s sluggish response times, CHA said. This delay is not only straining hospital resources, but also impacting patients’ access to appropriate care settings.


Locally, Scripps Health and Sharp HealthCare, two prominent medical providers in San Diego County, reported a combined total of 163 patients awaiting discharge. Scripps Mercy Hospital San Diego alone had 52 patients ready for discharge, highlighting the scale of the issue.

“That is abused by insurance companies every day with their denials, delays (and) failure to have 24/7 staff available to give authorizations for care while hospitals operate 24/7,” Chris Van Gorder, Scripps’ CEO, told the Tribune. “The insurance companies don’t have sufficient networks under contract to take patients ready for discharge immediately.”

The legal basis for CHA’s lawsuit rests on the Knox-Keene Act, which mandates timely provision of covered healthcare services. Despite these legal obligations, Anthem has not yet responded to the claims put forth by the hospital association.

The hospitals’ behavioral health units are the worst hit by these delays, with one patient at Scripps who needs discharge having now occupied a bed for 1,212 days or 3.3 years.

CHA’s statewide survey of 400 member hospitals in 2023 revealed alarming statistics: 9% of all hospital patients, 12% in psychiatric units, and 4% of emergency patients were unnecessarily occupying beds after being ready for discharge. These prolonged stays consume about 1 million patient days annually and drain 7.5 million hours of emergency department resources, leading to an estimated $3.25 billion in avoidable costs each year.

This rising trend of complex behavioral health needs in the skilled nursing sector, is being addressed by partnerships of health care delivery organizations with virtual platforms.

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