* Press release…
For the first time ever, the Illinois Department of Insurance (IDOI) announced today fines totaling $339,000 for Health Care Service Corporation (HCSC), the parent company of Blue Cross Blue Shield of Illinois, for violating the material change notice requirement in the state’s Network Adequacy and Transparency Act.
Network adequacy filings are an important tool to help ensure that consumers have access to a network of providers that meets proper time and distance standards. This is critical to ensuring that patients have access to care that they need.
The Department found that the company did not properly file updated network adequacy filings following the termination of its contract with Springfield Clinic which serves approximately 100,000 consumers in Central Illinois. After months of delay, the Department finally received BCBS’s final filing for its network adequacy review on Thursday. The Department determined that the filings were 244 days late and 95 days late, accumulating a total fine of $339,000. Late fees are $1,000 per day.
“Insurance companies must be able to show that they have adequate provider networks, so that Illinois consumers have access to the medical care and providers that they pay for,” said Governor JB Pritzker. “This fine should serve as notice that we will require insurers to maintain adequate provider networks and uphold all consumer protections under the law.”
Although the Department reviews every plan’s network for adequacy when the plan is filed, the law recognizes that a plan’s network may change mid-plan year. In anticipation of these potential changes, there is a provision that if there is a “material change” in the network, the company must submit updated network adequacy filings to demonstrate that the change has not rendered the network inadequate. Under state law, insurers are required to report to the Director any material change to an approved network plan within 15 days after the change occurs.
“This is the first time the Department has issued a fine for the material change filing requirement in the Network Adequacy Transparency Act,” said IDOI Director Dana Popish Severinghaus. “We’re disappointed that the company continues to evade acknowledging this material change. Under Illinois law, the removal of a major health system, like Springfield Clinic, is a material change that could render a network, or parts of a network, inadequate. We are committed to exercising the Department’s full authority to protect consumers from being harmed in a corporate contract dispute.”
Blue Cross Blue Shield must pay the fine immediately, and the company has 10 days to contest the fine. The Department will continue its review of the network adequacy filing for compliance with applicable state and federal laws.
The Notice of Apparent Liability for late filing of Network Adequacy can be found here.
* Last week, Richard Irvin’s campaign suggested imposing those daily fines, among other things…
• Swiftly investigate Blue Cross Blue Shield’s compliance with the state’s network adequacy requirements, and impose fines for every day it is in violation.
• Order Blue Cross Blue Shield to provide true continuity of care coverage as required by state law and re-adjudicate previous claims that should have been considered in-network.
• Consider capping Blue Cross Blue Shield’s enrollment if the company does not swiftly come into compliance with provider network adequacy requirements.
Now that the government has network adequacy requirement data, it can take a look at what’s actually going on. But the Department of Insurance dropped the ball here. No way should it have allowed BCBSI to not file those reports for so long, particularly since this impacts a hundred thousand people in central Illinois.
And though I doubt BCBSI would even notice a grand a day, the company is taking increasing Statehouse heat, including a recent call to strip its state tax-exempt status. Big Blue has stayed relatively mum so far, but they’re now starting to engage.
…Adding… A top official in the Pritzker administration says BCBSI is not a not for profit corporation, despite reporting to the contrary. “There is no tax exemption for BCBS in IL,” the official texted.
* From Harmony Harrington, Vice President, Government, Communications and Community Engagement at Blue Cross and Blue Shield of Illinois…
“Blue Cross and Blue Shield of Illinois has been working closely with the Illinois Department of Insurance since contract negotiations first began with Springfield Clinic last May. Though we had a reasonable and well-informed opinion that Springfield Clinic’s decision to leave our network did not trigger any network change filing, when the Department requested one within the past few weeks, we promptly complied. As we evaluate the Department’s decision, we will continue to work collaboratively and in compliance with applicable laws and regulations while ensuring access, affordability and quality in health care for the more than 8 million Illinoisans we cover.”
The insurance company has claimed that Springfield Clinic is demanding a 75 percent increase in what they claim is an already high reimbursement rate. As a Blue Cross policyholder and a Springfield Clinic patient, I want this to end now. I don’t know what the state can do if the clinic is indeed making outrageous demands, but if BCBSI is to be believed, they’re not totally at fault here and Springfield Clinic needs to get to the table with reasonable expectations. /rant