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NC Insurance Commissioner says Blue Cross could face hefty fine

A client enters the Blue Cross Blue Shield of North Carolina Triangle Sales Center in the Village Market Place shopping center in Morrisville. The N.C. Department of Insurance says it has now received more than 8,700 calls and about 1,900 formal complaints against Blue Cross this year.
A client enters the Blue Cross Blue Shield of North Carolina Triangle Sales Center in the Village Market Place shopping center in Morrisville. The N.C. Department of Insurance says it has now received more than 8,700 calls and about 1,900 formal complaints against Blue Cross this year. hlynch@newsobserver.com

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 intends to levy the maximum permissible fines against the Chapel Hill insurer for the company’s unprecedented administrative failures.

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. What’s more, about 70 priority cases on which the Insurance Department had intervened have had to be reopened 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 Blue Cross this year to contact his staff so they can compile all violations for the purpose of calculating a financial penalty against the insurer.

The 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.

“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, who is up for reelection in November, discussed his frustrations in his office on Wednesday.

Blue Cross was slammed with customer complaints in January after it had attempted 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 botched, and how many have been affected by the technology malfunctions.

The Department of Insurance has been intervening on behalf of the most urgent cases to get Blue Cross to manually activate policies so these customers could receive chemotherapy treatments, surgeries, medications and other medical services.

For the thousands of other people who have not been able to confirm coverage, Blue Cross has said they should pay for their medical care out-of-pocket and Blue Cross would reimburse them later, once their insurance coverage has been sorted out.

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 Goodwin did say that the billable hours for any extra resources enlisted in the investigation would be charged to Blue Cross.

“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.”

John Murawski: 919-829-8932, @johnmurawski

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