Dive Brief:
- North Carolina's Department of Insurance is fining Blue Cross and Blue Shield of North Carolina $3.6 million over ongoing IT problems that have impacted customers and providers since January.
- The two entities agreed on the fine amount last week, putting an end to the six-month investigation in which Blue Cross had challenged the state's findings of wrongdoing.
- The agreed upon fine is double the amount the state's insurance department had ever levied before--a fine that also went to Blue Cross back in 2003 over a lack of coverage for emergency care, The News & Observer noted.
Dive Insight:
Blue Cross denied any wrongdoing in the bungled IT management that resulted in nearly 3,500 complaints as of the end of August regarding problems around billing and incorrect moves to continue, add or drop coverage. Some reimbursements were reportedly delayed by weeks or months, requiring the insurance department to step in on behalf of providers and patients with immediate financial or care needs.
The insurer said in the agreement it has "been actively addressing these issues, and expects to be stronger as a result of this process," and added it only settled “to avoid the uncertainty, distractions, and expense of litigation."
The $3.6 million fine is only the tip of the iceberg in the company's expenses. The settlement states the company has paid at least $11.3 million to customers in restitution and at least $8.3 million to providers in interest from late reimbursements.
Blue Cross blamed its technology platform, Topaz, and software program, Facets, for problems with transferring accounts from a previous platform. It said problems began in late 2015 and rather than resolving as expected, persisted as the company attempted to go forward with 2016 enrollment. The months-long mess resulted in the resignations of at least two company executives.
In the midst of recovering technologically and financially from a rough 2016, the company has to look forward to decide whether to continue to participate in 2017 ACA open enrollment in all 100 North Carolina counties. Although it has done so for the past three years, it could find itself taking on hundreds of thousands more customers left adrift by the exits of Aetna and UnitedHealthcare, The News & Observer added.