Blue Cross fined by state for third time in two years

Rep. Sue Scherer reintroduces health insurance reform bill

A third fine in fewer than two years for Illinois’ largest health insurance company proves that stronger regulations are needed to prevent insurers from promoting “ghost networks” of providers, state Rep. Sue Scherer says.

“The fines are not solving the problem,” Scherer, D-Decatur, said in response to the Illinois Department of Insurance’s $231,900 fine announced Nov. 3 against the parent company of Blue Cross and Blue Shield of Illinois. “The Department of Insurance keeps fining them, but the problem isn’t going away.”

Scherer tried but failed in April 2022 to pass a health insurance reform bill in the Illinois General Assembly amid complaints from constituents who were Blue Cross members and were having a hard time locating in-network doctors after their Springfield Clinic doctors became out-of-network providers in November 2021.

The bill failed to muster the required 60 votes to pass the House and wasn’t debated in the Senate.

Blue Cross fined by state for third time in two years
Rep. Sue Scherer, D-Decatur, tried but failed in April 2022 to pass a health insurance reform bill in the Illinois General Assembly amid complaints from constituents who were Blue Cross members and were having a hard time locating in-network doctors after their Springfield Clinic doctors became out-of-network providers. She has now reintroduced her legislation for consideration during the spring 2024 session.

Removal of the approximately 600 clinic doctors, nurse practitioners, physician assistants and other clinic providers in central Illinois from Blue Cross’ network was part of a contract dispute between the company and the clinic that remains unresolved.

Scherer, who reintroduced her legislation as House Bill 4126 for consideration during the spring 2024 session, said residents of the 96th House District told her they found Springfield Clinic doctors and other doctors incorrectly listed in Blue Cross’ online directories as in-network providers.

Insurance department officials said in a news release that the latest fine was based on Blue Cross not taking all corrective actions required when the department fined Chicago-based Health Care Service Corp. $605,000 in March. State officials said the company violated the Illinois Network Adequacy and Transparency Act.

Among other findings, Blue Cross was cited for sometimes listing incorrect travel times to providers in certain parts of the state, failing to provide the current status of providers and not doing enough checking to make sure provider directories were up to date.

The company also “failed to provide a written response to written inquiries and complaints within 21 days of receipt,” officials said in a March 9 news release.

HCSC paid the $605,000 fine, but state insurance regulators said they still were able to document incorrect status listings for four providers, triggering the $231,900 fine. Insurance department officials didn’t say where the four providers were based.

State officials said the company now is complying with the department’s earlier order.

According to the state, that order requires HCSC to create an improved search process within its provider directories and say whether a provider is accepting new patients.

The order also says that for providers who are in-network for facility or hospital admitting rights only, those providers will no longer show up in specific health plans, “to avoid confusing consumers who are searching for doctors and specialists available for in-office visits.”

Blue Cross spokesman John Simley told Illinois Times in a statement that Blue Cross “strives to provide its members with an accurate and usable provider directory.

“We recently completed a series of updates to our online directories to make them easier to use for our members and prospective members,” he said. “When we learn information is inaccurate or incomplete, we fix it. Information related to the four providers noted in the department’s order was corrected in May.”

Blue Cross paid a March 2022 fine of $339,000 for failing to notify the state in 2021 about the removal of Springfield Clinic as an in-network provider.

The 2022 action marked the first time the insurance department issued a fine in connection with the Network Adequacy and Transparency Act. That law was enacted in 2017 for health plans beginning Jan. 1, 2019, and beyond.

After the latest fine, Illinois State Medical Society President Dr. Rodney Alford of Watseka said in a statement the society is pleased to see Blue Cross held “accountable for yet another violation” of the act.

“It’s remarkable that this company continues to ignore the NAT Act’s requirements to maintain up-to-date, accurate and complete provider directory information for their customers – the patients of Illinois,” Alford said. “Inaccurate directory information is frustrating to patients and leads to delays in care.”

Springfield Clinic spokesman Zach Kerker said the clinic commends Gov. JB Pritzker’s administration “for continuing to uphold laws that protect patients and hold insurance companies accountable for violating network adequacy requirements.”

Kerker said “dozens” of the clinic’s providers are incorrectly listed as in-network in Blue Cross’ directories, “and it’s confusing to patients.”

Regarding the contract dispute, Kerker added, “Springfield Clinic remains hopeful for an agreement, as we have since BCBS removed us from their network two years ago.”

Simley, the Blue Cross spokesman, said: “Springfield Clinic has well-respected providers in its practice, and we would like to have them back in our network, but we need to ensure that any new arrangement provides our members and employer groups with the right value at a fair price. … The lines of communication are open, and we look forward to new conversations.”

Scherer said her bill would strengthen the state’s powers to hold insurance companies responsible for treating customers fairly and promoting provider networks that purport to be comprehensive.

Such “ghost networks” are predominantly a problem in central Illinois but aren’t exclusive to this part of the state, she said.

Fines aren’t enough to improve service to consumers, Scherer said, adding that total fines of slightly more than $1 million are insignificant to HCSC, which serves more than 18.6 million members through plans in Illinois, Montana, New Mexico, Oklahoma and Texas and reported almost $1.5 billion in profits in 2022.

“It’s like one grain of corn in a whole silo,” said Scherer, whose district also includes much of Springfield and parts of eastern Sangamon County.

Among other things, Scherer’s bill would allow state officials to confirm the existence of investigations of insurance companies and create more stringent standards for maintaining accurate online lists of doctors in networks.

The bill also would put in place time and distance standards more stringent than required by federal requirements to ensure in-network access to specialists closer to patients’ homes.

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