As Blue Cross and Blue Shield’s enrollment and billing issues drag into their third month, N.C. Insurance Commissioner Wayne Goodwin said Wednesday he is seeking any evidence that could be used to calculate a fine against the Chapel Hill-based insurer.
Goodwin said his agency has now received more than 8,700 calls and about 1,900 formal complaints against Blue Cross this year, creating a workload equivalent to nine months in the past nine weeks. Goodwin said he is particularly concerned that 70 priority cases on which the Insurance Department had intervened have had to be reopened recently because the enrollment and billing problems resumed.
Goodwin, who launched an investigation of Blue Cross last month, is urging all customers who have experienced problems with the company this year to contact his staff so it can compile all violations for the purpose of calculating a financial penalty against the insurer.
The not-for-profit insurer could be charged up to a $1,000 a day per violation under one state law, but Goodwin said other laws could also apply.
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“I am looking for every finable violation that I can find,” Goodwin said. “I am looking at the entire arsenal of solutions that I can deploy.”
The two-term insurance commissioner, a Democrat who is up for reelection in November, discussed his frustrations in his office on Wednesday. Goodwin said Blue Cross is making slow progress in its effort to fix a technology fiasco that should have long been resolved by now.
Blue Cross was slammed with customer complaints in January after attempting to transfer about 400,000 customers on individual insurance policies – most of them on the Affordable Care Act – from a legacy software system to a new billing and enrollment software called Facets, and also known as Topaz.
Customers reported getting double-billed, overbilled, unenrolled or enrolled on the wrong policies. It’s not clear why some customers were correctly enrolled and others mishandled, and how many have been affected by the technology malfunctions.
Blue Cross, the state’s largest health insurer, says the administrative problems are largely fixed.
“We apologize for the frustration this has caused and will work closely with the Department throughout its review,” Blue Cross said in an emailed statement Wednesday. “Though the majority of issues that many of our members faced are resolved, we recognize that even a small percentage of our 3.9 million customers equals too many people.
“Call volumes and hold times are down significantly, although not yet to the levels we or our customers expect,” Blue Cross said. “We are working hard to make things right and address all concerns.”
17 insurance cards
The Department of Insurance is still experiencing a backlog of problems and reactivating older case files. The agency has been intervening on behalf of urgent cases to get Blue Cross to manually activate health coverage so these customers could receive chemotherapy treatments, surgeries, medications and other medical services.
Heather Phillips of Zebulon contacted the Insurance Department last month after she and her husband, along with three children, were enrolled in the wrong plan this year. She said Blue Cross switched her family to the right plan in February, but then Phillips discovered her middle child was not on the policy. Instead, the policy listed someone with a similar name as her son, but showing a different middle initial, with an address listed as “Johnston, N.C.”
Phillips, a stay-at-home-mom and home schooler, said Blue Cross notified her on Feb. 26 that the discrepancy was resolved. But when she logged onto the insurer’s online portal on March 4, her family’s policy listed only four family members, omitting another of her children.
Phillips, 39, said she should have two insurance cards from Blue Cross, one for her and one for her husband. To date, she has received 17 insurance cards in the mail, most recently on Tuesday, all of them containing incorrect information.
“The confusion is not having the correct card and not having the correct child and not being sure who is insured,” she said. “We just lucked out that we didn’t have to use our doctors in February.”
Patricia Gavin, a Southport resident whose cancer is in remission, said she’s either been on the wrong Blue Cross policy, or the right policy but the wrong price, this year. Currently she’s insured on a policy that she believes should cost $535 but she is being charged $704 a month.
Gavin said she has paid for two months at the $535-per-month price, which she believe she owes. She last discussed the issue with Blue Cross on Wednesday, after waiting on hold for two hours.
“Now I’m getting letters from Blue Cross saying I have to pay or I am losing my health insurance,” Gavin said. “This just goes on and on – it’s unbelievable.”
“I’m still working at it,” said Gavin, 63, a retired nurse practitioner who teaches a pharmacy technician certification course at Brunswick Community College.
Goodwin said that billing overcharges impose a financial burden on people, especially those who have been unable to count on reliable coverage and customer service.
For the untold number of customers who have not been able to confirm coverage, Blue Cross has said they should pay for their medical care out-of-pocket and the company will reimburse them later, once their insurance coverage has been sorted out.
According to internal Blue Cross documents, the company created a Topaz Command Center on Feb. 22 to centralize the company’s efforts to resolve the ongoing technical glitches, but the headaches appear to be recurring.
On March 1, an internal email from Bill McLernan, a Blue Cross senior analytic data consultant, alerted management that Blue Cross has not been able to pay doctors since Feb. 9 from its Facets software. A separate internal post said Blue Cross “identified some errors in processing certain claims for customers who buy individual plans.”
The problems include wrongly charging coinsurance, errors in calculating deductibles, and denial of service, according to the Feb. 25 intranet page called Sales & Marketing News You Can Use.
Blue Cross has not publicized these problems.
“We will not post a producer news article about this at this time,” the internal notice says. “Members may have claims affected by the below scenarios. DO NOT describe the specific scenarios to the member, but they may have a claim affected by one or more of these issues.”
Lew Borman, a Blue Cross spokesman, said the payment delays were foreseen.
“We advised providers in advance that there may be delays in claims processing,” Borman said by email. “To ensure accuracy of payment, we are putting claims through a secondary review and audit. As a result, only a small percent of claims are delayed.”
Goodwin said his agency’s investigation is likely to take months and noted that he is barred by state law from providing an update or any details, such as whether he is hiring outside lawyers and investigators to assist his staff.
But he said that as part of the investigation his staff will propose to the state legislature a change in state law that would allow the Insurance Commissioner to order an insurer to pay restitution to customers who did not receive services they paid for. Right now any fines paid by an insurer are transferred to the state treasury.
“We’re going to hold this company accountable,” Goodwin said. “Blue Cross has the resources to hire as many people as they need to rectify this matter.”