Blue Cross fined $3.6M by NC for billing, enrollment problems

The N.C. Department of Insurance has levied a record $3.6 million fine against Blue Cross and Blue Shield of North Carolina for widespread problems that led to billing and enrollment errors for Blue Cross customers since January.

The Insurance Department and Blue Cross, the state’s largest health insurer, agreed to the fine amount Thursday, ending a six-month agency investigation in a voluntary settlement agreement. Blue Cross paid the fine Thursday for over-billing, double-billing, failing to confirm coverage, canceling coverage customers wanted, and signing customers up for policies they didn’t want.

Nearly 3,500 customers and medical providers lodged complaints with the agency through the end of August. The doctors and other providers said Blue Cross insurance reimbursements were delayed by weeks and even months. The Insurance Department intervened on behalf of patients in immediate need of medical attention and in other dire circumstances.

“As your insurance commissioner and an advocate for consumers across North Carolina, Blue Cross and Blue Shield had to be held accountable,” Insurance Commissioner Wayne Goodwin said in a statement.

The fine is twice the amount of the previous record fine, which had also been levied against Blue Cross in 2003, for failing to provide coverage for emergency care.

The funds will be drawn from Blue Cross’s reserves and will not affect customers rates, according to the Department of Insurance.

Blue Cross began experiencing problems in early January while enrolling customers through the Affordable Care Act and other individual policies. The company blamed its software platform, Topaz, for crashing and preventing the transfer of some 400,000 customer accounts into a new technology system.

Chapel Hill-based Blue Cross was experiencing problems with Topaz in late 2015 but company officials opted to go ahead with enrollment in 2016 on the assumption that the situation would be fixed promptly. Instead, the problems cascaded and Blue Cross was slammed with nearly half-a-million customer calls in the first week of enrollment.

Some customers reported spending more than 20 hours on hold as they tried to get problems resolved.

At least two Blue Cross executives resigned from their jobs as a result of the problems, which continued well into summer as Blue Cross scrambled to resolve the technology fiasco.

John Murawski: 919-829-8932, @johnmurawski