Blue Cross and Blue Shield says it has reinstated health coverage for thousands of stranded customers who were dropped from the insurer’s rolls in a technology debacle that cut off coverage for residents with urgent medical needs and rippled throughout the state.
But the state’s largest health insurer is not disclosing how many customers are still without health insurance, even as Blue Cross concedes that call volumes to the company’s help line remain far above normal.
Both the N.C. Department of Insurance and the N.C. Attorney General plan to review the episode, the most serious crisis in Blue Cross’s recent history, after immediate customer needs have been resolved. The two consumer protection agencies want to determine if any laws were broken and also want assurances that Blue Cross has put measures in place to make sure an error of this magnitude never happens again.
Insurance Commissioner Wayne Goodwin said he doesn’t want to “come out swinging” in a way that might distract Blue Cross’s focus from its customers. But he said he has scheduled a “high-level” meeting Tuesday between his deputies and Blue Cross executives for a status update.
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Goodwin said his agency’s focus has been doing triage for high-priority customers to get their coverage activated. He said that calls to Blue Cross from the Department of Insurance get speedy attention for distressed customers with pressing medical needs.
Goodwin described the situation as an “ongoing crisis,” and said Blue Cross is in the midst of massive effort to resolve the situation.
“We do not know the end date for a solution,” Goodwin said. “It is vital that we address the consumer complaints and policyholder needs first, and then address this crisis from a regulatory standpoint.”
Blue Cross has been deluged with calls from customers who haven’t been able to make payments, have been billed incorrectly, can’t confirm if they are insured, or have been inadvertently enrolled in a policy they didn’t want. The Chapel Hill insurer was slammed with about 450,000 calls in the first week of January, but the calls had tapered off to about half that volume last week.
Blue Cross’s chief executive, Brad Wilson, told employees in a company-wide email last week that most applications have been retroactively enrolled for January, and most insurance cards have been mailed to customers. The company is now processing a backlog of February enrollments, most of them for people enrolled in individual policies under the Affordable Care Act.
The company also told the state Attorney General’s office that as of Friday, Blue Cross had refunded nearly $2 million to 4,637 customers whose bank accounts were over-drafted. The average over-draft is about $420 per customer. At the same time, Blue Cross deputy general counsel Louis Patalano IV wrote to the Attorney General’s office that Blue Cross had under-billed about 25,000 customers by about $1.8 million, or about $72 per customer.
Blue Cross is now communicating with the over-drafted customers on processing refunds for the penalty fees charged by their banks, Wilson told employees in his email last week.
“I’m encouraged on the progress we are making on our operational issues,” Wilson wrote to employees. “We’ve made good strides over the past week, particularly on enrollment, ID cards and incorrect bank drafts.”
‘It’s a crisis’
The insurance department is receiving more than 100 calls a day on the issue, and Blue Cross customers have lodged 401 complaints. The department has successfully intervened with Blue Cross on behalf of people with heart problems and high-risk pregnancies, as well as those requiring cancer treatment, diabetes medications and emergency surgeries, Goodwin said.
“It’s life and death, as well as very serious medical emergencies,” Goodwin said.
“For people who have medical emergencies and procedures and checkups that must occur, for them it’s a crisis,” Goodwin said. “For someone who’s had their checking account billed twice, it’s a crisis.”
Blue Cross told the Attorney General’s office that the problems stemmed from the transfer of customer data for some 500,000 individual customers from a legacy software program to Facets, a program within a medical technology system called Topaz, designed by TriZetto, the nation’s leading health care billing and administrative vendor.
Wilson said in his Jan. 21 email that Blue Cross had successfully enrolled about 460,000 individual customers who are covered on 319,000 insurance policies. Blue Cross’s transition to the new technology began in 2012 and is not expected to be completed until 2020.
Blue Cross said the technology upgrade was exacerbated by postponed enrollment deadlines by the Affordable Care Act and inaccurate enrollment data from customers. The company said transactions failed to process, processed incorrectly and the processing took “excessively long.”
Internal documents show that Blue Cross had anticipated enrollment problems in December and planned to delay mailing ID cards to customers, but the woes cascaded and overwhelmed the insurer.
The Attorney General’s office and Department of Insurance will likely look at Blue Cross’s planning and preparation. They also may examine the consequences of Blue Cross’s decision to outsource some quality assurance work, terminating some IT employees in September, about 5 weeks before ACA enrollment got underway.
Blue Cross spokesman Lew Borman said half the affected IT workers found other positions within the company but would not disclose the number of people laid off in the reshuffling.
“We augmented our (quality assurance) work by working with a world-class leader in this type of work, Cognizant, to supplement our in-house team,” Borman said by email. “The majority of this work is being done in our offices in Durham. A smaller part is done in India. As some of this work was executed, we restructured part of the team.”
The resulting chaos is also affecting insurance agents, who have been notified they won’t receive their full sales commissions until February. Blue Cross will have to resolve billing issues with doctors and hospitals that are providing care for patients whose insurance coverage has not been validated.
“No question this is impacting operations and, more importantly, some of our patients, but we’re continuing to work with BCBS toward resolution,” Kenneth Morris, chief financial officer of Duke University Health System, said in an emailed statement. “While we make every effort to assist our patients in understanding their insurance coverage and benefits, recent changes in available plans in the market have resulted in confusion.”
In a Jan. 20 email urging Blue Cross employees to pitch in over the weekend, the insurer’s chief operating officer, Alan Hughes, said that over 375 employees had already volunteered to help field customer calls, noting that “our commercial Customer Service team has been through the wringer these last few weeks.”
Hughes thanked Blue Cross customer service representatives, who have been putting in overtime fielding customer calls, and reminded employees that they and the company face long, trying days ahead.
“We are making progress,” Hughes said in his email. “However, a return to ‘normal’ isn’t within the next week, or even the week after.
“We are on a longer path to recovery.”