Blue Cross and Blue Shield of Texas (BCBSTX) will pay a $10 million fine for providing consumers incorrect information, delays in out-of-network claims processing, and errors in marketing materials, the Texas Department of Insurance (TDI) has announced.
As part of a TDI enforcement order, BCBSTX also will repay consumers who seek restitution.
“Consumers who had higher out-of-pocket costs due to the errors will get refunds,” Texas Insurance Commissioner Kent Sullivan said in a TDI news release. “Ensuring the fair treatment of consumers and clear, timely consumer information are priorities for TDI.”
David C. Fleeger, MD, president of the Texas Medical Association, applauded TDI for holding the state’s largest health plan accountable.
“The significant administrative penalty sends a strong message to health plans regarding TDI’s consumer protection stance and the importance of health plans providing accurate consumer information,” Dr. Fleeger said. “This health plan’s errors have financially harmed our patients and countered the efforts of Texas lawmakers trying to rein in patients’ share of health care costs.
“Texas physicians agree with the state. Our patients deserve better.”
Blue Cross “issued explanations of benefits with incorrect notices to consumers, failed to timely process some out-of-network emergency claims,” and also “provided inaccurate summaries of policy information to consumers in its marketing materials,” TDI explains in its March 6 order.
For example, from August 2018 through October 2019, Blue Cross sent “out-of-network HMO emergency facility claims through a process it created, known as the Emergency Benefit Management (EBM) review process,” TDI’s order stated.
BCBSTX “did not adjudicate more than 80% of the approximately 8,000 EBM review claims within 30 days,” TDI wrote in its order. “A claim-by-claim analysis of whether each claim met all clean claim elements as defined under prompt pay laws and regulations was not performed, but BCBSTX acknowledges that some of these claims were clean and not timely processed.”
The order also explains that between 2015 and 2019, some HMO members incorrectly received notices that out-of-network claims may be eligible for mediation. However, HMO claims for services rendered prior to Jan. 1, 2020, were not eligible for mediation. And from “at least August 2017 to January 2020,” some members of one particular HMO plan did not receive notice of how to contact Blue Cross if they received a balance bill for out-of-network emergency care, TDI’s order said.
Also, for its plan years 2018-2019, the insurer “identified more than 125 statements in documents summarizing benefits … that are described in detail in a member’s plan that did not match” what was filed with TDI, the order said. About half of those discrepancies “describe a greater benefit” than the plan Blue Cross filed with the state. All told, more than 450,000 HMO and PPO members received benefit summary materials containing discrepancies, TDI found. According to the agency, Blue Cross sent “corrected information to consumers when it discovered an error,” or offered a special enrollment period if a consumer contacted the insurer.
In a written statement to Texas Medicine Today, Blue Cross and Blue Shield of Texas said it “takes responsibility for any confusion caused to our members or delayed payments to providers. The issues have been resolved. We continue to focus on supporting the health care needs of Texas consumers providing access to quality, cost-effective health care for our more than 6 million members across the state.”