Blue Cross payment delays squeeze some NC doctors

Technology woes at Blue Cross and Blue Shield of North Carolina have trickled down to some doctors who say it has been several months since they’ve been paid by the Chapel Hill-based insurance company.

Blue Cross, the state’s largest health insurer, also announced to employees last week that a second executive responsible for technology implementation will be leaving the company.

Ninety providers have complained this month to the N.C. Department of Insurance about Blue Cross payment delays. All the complaints involve patients who buy their own insurance, often through the Affordable Care Act’s federal exchange.

Chapel Hill Pediatrics said it is owed $89,000 for 381 backlogged claims. Village Pediatrics in Chapel Hill told the agency it is owed $53,000 for more than 135 claims, representing about half the practice’s monthly revenue.

“Most of the complaints are from small practices or solo practitioners who cannot continue to operate without receiving the payments they’re owed,” Kerry Hall, the insurance department’s spokeswoman, said in an email. “Commissioner (Wayne) Goodwin had serious concerns that BCBSNC’s problems would lead to small businesses going under.

“He has been in direct contact with CEO Brad Wilson this week,” Kerry said, “and told him he expects the company to put a plan into action immediately to make those payments.”

Blue Cross is manually reviewing claims for accuracy and warning providers they might not receive payment until mid-July for patients they saw early this year.

Blue Cross spokeswoman Ryan Vulcan said by email that only 15 percent of claims have been delayed “due to configuration issues that are being fixed.”

About 15 percent of Blue Cross’s 3.9 million customers in North Carolina are on individual policies, while the rest have Blue Cross coverage through their employers or through Medicare supplemental policies.

“It is important to note, 85 percent of claims are being paid normally,” Vulcan said. “Doctors facing financial hardship because of this delay should contact us directly. We have a team in place to help them with this delay.”

Another departure

As the payment complaints spiked at the Department of Insurance, the insurer notified employees last week that Stevie McNeal, who had worked for Blue Cross since 1995, will depart July 1. McNeal’s departure comes on the heels of an announcement this month that Alan Hughes, the chief operating officer, abruptly resigned.

McNeal, like Hughes, has been involved in transitioning more than 400,000 Blue Cross customers on individual health insurance policies from legacy software to a new technology system called Topaz.

The software system crashed in January, resulting in thousands of Blue Cross customers on individual policies being wrongly enrolled and overbilled, and triggering an investigation of Blue Cross by the Department of Insurance.

The agency has received 2,529 customer complaints as of last week seeking help with enrollment, billing and other Blue Cross malfunctions experienced over nearly four months.

McNeal’s resignation was announced by Gerald Petkau, the senior vice president who replaced Hughes as chief operating officer when Hughes left less than three weeks ago.

“Stevie McNeal’s role as the Topaz Program Executive is winding down and Stevie has decided to leave the organization on July 1st,” Petkau said in an email Thursday. “Stevie’s two primary responsibilities, between now and then will be to continue to support the DOI complaint resolution activities and to assist with our retrospective review of the challenges we experienced with our individual migration.”

Blue Cross typically pays doctors within two weeks after they file claims. Now, doctors and other providers are frustrated that under Blue Cross’ contract, the doctors have to give up payment if they are late filing claims to Blue Cross, but they have little recourse when Blue Cross is late paying the doctors.

Cash flow issues

Patients who haven’t used up their Blue Cross insurance deductibles ultimately will owe the belated medical bills, months after their doctors’ visits. But the doctors can’t bill their patients until Blue Cross processes the claims.

“This is a massive cash flow issue for us,” Chapel Hill Pediatrics said in its complaint last week. “The other side of this issue is once we receive processing of these claims, many will go towards the patient’s deductible so we will be billing for appointments four months ago.

“It makes us look very disorganized as a practice, and not trustworthy with patients information. This is unfair to us as a practice in terms of public relations.”

Both Chapel Hill Pediatrics and Village Pediatrics declined to comment about their frustrations with Blue Cross, on which they are heavily dependent for their income.

Under state law, Blue Cross will be required to pay 18 percent annual interest, or .05 percent per day, on any claims that are unpaid after 30 days.

Vulcan, the Blue Cross spokeswoman, did not respond to follow-up questions about the insurer’s team in place to help doctors resolve payment issues. One provider said he claimed financial hardship and got nowhere.

Financial distress

Joe Rabiega, a counselor and owner of Raleigh NC Therapy, said he is owed more than $4,000 for therapy sessions provided since February. Rabiega said that 90 percent of his patients have individual insurance coverage through Blue Cross, so that in the absence of Blue Cross paying him, his income has been largely limited to patient co-payments ranging between $10 and $60 per counseling session.

Rabiega said when he told Blue Cross phone representatives that he was experiencing financial distress, he was referred to the company’s website statement, which explains that payment delays will take 60 to 120 days to resolve.

On April 20, Rabiega received an email from Christy Lane, a director of claims business and agency management at Blue Cross, explaining that his hardship claim would not be expedited.

“At this time we are not escalating any claims through the system,” Lane told Rabiega. “We are working diligently to solve the processing problems for our provider community and our members.”

Rabiega, who has four children and a wife at home, said he is running out of options.

“Very shortly, we’re going to have to use credit cards to make ends meet,” Rabiega said. “I’m thinking of having to get another job. I don’t know. It’s really getting to me.”

This story was originally published April 26, 2016 at 10:58 AM with the headline "Blue Cross payment delays squeeze some NC doctors."