AP NEWS

Blue Cross Blue Shield fined for improperly denying claims

July 9, 2019

BISMARCK, N.D. (AP) — North Dakota Insurance Department announced Tuesday it fined the state’s largest provider of health insurance $125,000 for improperly denying some claims and not reporting suspected cases of fraud.

Insurance Commissioner Jon Godfread said the 16-month investigation of Blue Cross Blue Shield of North Dakota focused largely on mental health and substance abuse claims. Some of the claims were improperly denied and there was “disagreement on the treatment level” of others, he said.

Under a 2008 federal law, health insurers are required to treat mental illness and substance abuse the same as other conditions. Jeff Ubben, the insurance agency’s deputy commissioner and general counsel, said Blue Cross Blue Shield of North Dakota was not in compliance with the parity law.

Godfread said Blues has been “extremely cooperative” with regulators and has “fixed problems proactively as we found them.”

“The health insurance industry continues to grow significantly more complex and this review reveals that we can do more to ensure its compliance in this highly regulated environment,” Blue Cross Blue Shield of North Dakota President and CEO Tim Huckle said in a statement.

The health insurer expects to invest more than $300,000 to address issues identified by regulators, Huckle said. Those costs would be funded through “reductions and efficiencies” and not passed on to its members in the form of higher premiums, his statement said.

Godfread said while the state fine may seem small against the company, the goal is for the insurer to cover mental health and substance disorder treatment at the same level as physical health.

“Our goal is compliance,” he said.

Blue Cross Blue Shield insures or administers claims for about 347,000 people in North Dakota, including people who worked for the state for more than three decades until 2015. It also has been the only insurer offering statewide coverage on the federal Affordable Care Act exchange.

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