* 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
- SuburbanRepublican - Monday, Mar 21, 22 @ 9:53 am:
How does a company like BCBS have a tax-exempt status? I find that interesting.
- Anyone Remember - Monday, Mar 21, 22 @ 9:55 am:
Springfield has higher health care rates than Chicago. Has the presence of a medical school been factored in? Going back well before Clinton’s failed health care proposal, it has been commonly accepted medical schools (and connected medical facilities) have higher rates. Is that what’s going on here?
- Anyone Remember - Monday, Mar 21, 22 @ 9:57 am:
===But the Department of Insurance dropped the ball here.===
DoI dropped the ball decades ago. The “accurate” criticism would be “they failed to pick up the ball” …
- Sangamo Girl - Monday, Mar 21, 22 @ 10:00 am:
Yet another example of what happens when healthcare is a for-profit industry.
According to the WCIA report the beef started when BCBS started selling coverage that was supposed to only be available on the ACA exchange. Without actual costs/fee schedules, etc. to compare, it’s very difficult to weigh the spin from both sides.
‘“That plan was intended for the [Affordable Care Act],” Zach Kerker, a vice president at Springfield Clinic, explained. “It was intended for people who had purchased plans through the exchange online.”
The Blue Choice plan covered roughly 10,000 patients at Springfield Clinic, according to Kerker. When Blue Cross started selling that cheaper, lower-paying plan to a broader pool of patients, the clinic stopped accepting it.’
- SKI - Monday, Mar 21, 22 @ 10:01 am:
Yet another argument for ending privatized healthcare. The usual arguments against government run / public healthcare center around lack of service / inefficiency.
When you have restrictions like this BCBS deal plus the amount of hoops private insurance makes you jump through just to get claims paid or proper care, what’s the difference between them and a public option?
- Banish Misfortune - Monday, Mar 21, 22 @ 10:11 am:
It is important to determine why there was a failure to execute. Most public employees are dedicated public servants. However it is well known that departments and agency can become “captured” by the agencies they are to regulate. Or it can be decades of underinvestment in the agency, resulting in insufficient personal to do the job. Important to figure out what is the reason for this failure.
- SpiDem - Monday, Mar 21, 22 @ 10:14 am:
Springfield Clinic and BCBS are under no obligation, legal or otherwise, to agree to terms or engage in a contractual relationship.
BCBS, however, has a statutory obligation to provide accurate and true information to those they serve about the providers in their network, and the Department of Insurance is legally obligated to enforce that law. Both of them have ignored the law for close to a year.
We shouldn’t be conflating the 2 issues. BCBS has now updated their information. They need to pay the fine and move on. If they lose Springfield Clinic healthcare consumers as a result of not coming to an agreement with that system, that’s a business decision, nothing more.
- Captain Obvious - Monday, Mar 21, 22 @ 10:14 am:
Not sure the state can or should do anything about the price the Clinic puts on it’s services. No one is forced to get their medical care there. But there are specific state laws and regulations that apply to Big Blue and it would be and is shameful for state to not enforce them strictly. Those who can would be well advised to acquire insurance the Clinic will accept if they wish to be patients there. Interesting that only Big Blue has a problem with the reimbursement rate demanded by the Clinic. I’ve not heard of other companies dropping the Clinic from their networks.
- SpiDem - Monday, Mar 21, 22 @ 10:16 am:
–Suburban Republican–
You might be surprised to learn that most health insurance companies are organized as tax-exempt not-for-profits. BCBS is the rule in this regard, not the exception.
- OneMan - Monday, Mar 21, 22 @ 10:16 am:
== This is the first time the Department has issued a fine for the material change filing requirement in the Network Adequacy Transparency Act ==
Interesting, is this the first time the act has been violated or the first time someone has made it a political issue?
- SpiDem - Monday, Mar 21, 22 @ 10:17 am:
–OneMan–
The network adequacy law in Illinois is only been on the books for about 3 years
- Joe Bidenopolous - Monday, Mar 21, 22 @ 10:21 am:
=According to the WCIA report the beef started when BCBS started selling coverage that was supposed to only be available on the ACA exchange.=
No. That’s according to Springfield Clinic, as you excerpted. And I take what both they and BCBS say about this dispute with a grain of salt. But it is very well known that health care in Springfield has always been a high cost proposition, so…
- Bruce( no not him) - Monday, Mar 21, 22 @ 10:22 am:
Both sides saying simultaneously:
” We did nothing wrong. All we want to do is take care of our clients.” /s
- Lady on the Right - Monday, Mar 21, 22 @ 10:25 am:
–OneMan– that’s right. It sounds like DOI has been aware for months now and just recently decided to touch the issue.
- Rich Miller - Monday, Mar 21, 22 @ 10:44 am:
===that’s a business decision, nothing more===
Just love me some soulless bean counters.
- Chicagonk - Monday, Mar 21, 22 @ 10:53 am:
Maybe the state should look at the HFSRB and all the decisions that they have made over the years to prevent new capacity from entering the market.
The fact that it took state legislatures seeing their doctors removed from their network in order for the DOI to make a decision is just comical.
- Lady on the Right - Monday, Mar 21, 22 @ 10:57 am:
=The insurance company has claimed that Springfield Clinic is demanding a 75 percent increase in what they claim is an already high reimbursement rate. =
-Captain Obvious- =Not sure the state can or should do anything about the price the Clinic puts on it’s services. No one is forced to get their medical care there.=
So what, clinic gets to demand whatever they want and BCBS has to say yes?
- Ron Burgundy - Monday, Mar 21, 22 @ 11:07 am:
-DoI dropped the ball decades ago. The “accurate” criticism would be “they failed to pick up the ball” …-
We all dropped the ball, in the sense that DOI has less than half the staff it had decades ago and keeps getting new mandates imposed on it. Doing more with less sounds great, until we found out they are actually doing less with less.
- Columbo - Monday, Mar 21, 22 @ 11:15 am:
As a long time BCBS policy holder, and Spfld Clinic customer/patient, this whole exercise has been a trainwreck…for patients. My bride has been battling cancer for 10 years, and thankfully has received good treatment from our docs at the Spfld Clinic. Although I’m not sure there are any innocent parties here, my understanding is that the Clinic’s initial offer was in the 300% increase range, which may have now settled at 75%.
We held on as long as we could, but to keep the docs we liked, we had to switch to United Healthcare, where premiums were 38% higher. Regardless of who comes out of this as the perceived “winner”, its clear that health care costs are going to jump notably in Springpatch. /rant
- SpiDem - Monday, Mar 21, 22 @ 11:22 am:
Rich –
Just stating a simple fact. News flash: “Bean counters,” to use your term, run the entire American health care system.
You may or may not like the current system (I certainly don’t), but don’t conflate the difference between compliance with a legal requirement that was passed into law specifically to ensure people have accurate information about access to care when choosing a health care plan; and a business decision between two big players in the system in Springfield and whether they can agree to a contract.
To the extent that they are connected at all, it would only allegedly be because BCBS was misleading their customers to gain advantage in the contract dispute — and that, to my knowledge, is not even proven at this point.
The only thing we know for certain is that BCBS lied to their customers and in doing so, violated the law. And that DOI took a good long time getting around to enforcing the law.
- Nick Nombre - Monday, Mar 21, 22 @ 11:43 am:
“So what, clinic gets to demand whatever they want and BCBS has to say yes?”
The clinic gets to demand what it wants, and the insurance company has to decide whether it wants to continue work with them. The actual users of the service, the patients, don’t have much say. That’s how healthcare works in the US and why the cost of care is so much more expensive than in the rest of the world.
- cermak_rd - Monday, Mar 21, 22 @ 12:01 pm:
Are there other clinics in central IL that do take BCBS? Up here, if AMITA won’t take BCBS (they do) then I would go to Sinai. But health care resources are thick on the ground up here.
- AD - Monday, Mar 21, 22 @ 12:19 pm:
Cermak- 3: SIU, HSHS, and Memorial.
- Joe Bidenopolous - Monday, Mar 21, 22 @ 12:27 pm:
=You might be surprised to learn that most health insurance companies are organized as tax-exempt not-for-profits. BCBS is the rule in this regard, not the exception.=
“Most” seems to be doing a lot of work here. If you mean by the sheer number of for-profits vs not-for-profits, maybe. But 5 of the six largest insurers are for-profit (BCBSIL parent HCSC is #5 on the list) and they account for about 45% of all insured in the US, so…
===We held on as long as we could, but to keep the docs we liked, we had to switch to United Healthcare, where premiums were 38% higher. ===
This is an anecdote, so take it as such. But if United Healthcare premiums are in fact nearly 40% higher than BCBS, well, maybe Springfield Clinic has something to do with that and BCBS’s claims that they wanted a 75% increase seem more plausible
- Observation - Monday, Mar 21, 22 @ 12:32 pm:
–Are there other clinics in central IL that do take BCBS?–
Yes, there are other clinics. But when 100,000+ patients have to find new physicians in a matter of several months, options are limited. BCBS is supposed to agree to “continuations of care” for patients who are mid-stream in a treatment plan for certain conditions. My pregnant friends can attest that the approval
system is not working.
- Curious citizen - Monday, Mar 21, 22 @ 1:30 pm:
I’m sorry you’re caught in the middle of all this, Rich, but that’s where I was about 15 years ago when BCBS split up with Memorial. The two sides eventually came to terms, but not before we had to shop for new doctors.
That conflict never got a fraction of the media coverage that the current one is getting.
- Franklin - Monday, Mar 21, 22 @ 1:34 pm:
Interesting to see the Governor weigh in on a private contract dispute on the side of doctors who openly admit are fighting back against insurance plans offered on the ACA exchange that the Governor oversees.
- cermak_rd - Monday, Mar 21, 22 @ 2:54 pm:
Franklin,
I would say rather that he is fighting against 100000 people (and possibly a large part of that eligible voters) being thrown in to turmoil. This is not a streaming company won’t carry channel X because of a contract dispute type issue. Because people having to get new doctors is a big deal. Even if they’re not in the middle of a health care issue, finding a doctor that has compatible temperament, office hours and room for new patients can be a real pain.
- NonAFSCMEStateEmployeeFromChatham - Monday, Mar 21, 22 @ 2:54 pm:
==I’m sorry you’re caught in the middle of all this, Rich, but that’s where I was about 15 years ago when BCBS split up with Memorial. The two sides eventually came to terms, but not before we had to shop for new doctors.
That conflict never got a fraction of the media coverage that the current one is getting.==
This BCBS-SC battle is reminiscent of when Quinn and DHS originally pulled Health Alliance and Humana (among others) back in Spring 2011 from the state employee health insurance options. In favor of BCBS, which IIRC at that time didn’t cover Springfield Clinic as part of their in-network options. Eventually after similar outcry Health alliance was reinstated.
- Peanut - Monday, Mar 21, 22 @ 3:12 pm:
I had Health Alliance in 2011 and when the contract was cancelled then a new agreed to we had to meet a second deductible. I stuck with a different provider after that.
- MaconMaven - Monday, Mar 21, 22 @ 3:17 pm:
My husband & children are impacted by this awful issue as well. The first available appointment my husband could find when he tried calling in August was in February because of all the people looking for new providers. His employer (union construction industry) told their members to not change providers since SC and BCBS would be coming to an agreement and then didn’t, so our Urgent Cares have been slammed with people between primary care providers.
At our local pharmacy, people are constantly worried how they are going to pay for their drugs now. How many more issues will emerge when these BCBS patients have to pay out of network fees they shouldn’t have to pay so they can pay their trusted doctors to continue their care?
Springfield Clinic doesn’t currently have $10 Billion in revenue or pay record bonuses for their C-suite executives during the pandemic like BCBS. BCBS parent company can afford more than the measly reimbursment they are offering SC.
Senator Koehler proposed a bill last year to have Medicaid MCOs donate 20% of patients premiums (which turned into profits for insurance companies since many providers offices were closed due to covid restrictions.) I think the Senate should absolutely revisit this to have BCBS refund patients impacted by this a portion of their premiums. I will be watching the House Insurance Committee hearing tomorrow & hopefully they make an example out of BCBS to stop using patents as blank checks for their shareholders.
- Regenerate the State - Monday, Mar 21, 22 @ 3:57 pm:
Ask the Department of Insurance how many market conduct exams they have done of BCBS in the last twenty years and what the results were.
- Original Rambler - Monday, Mar 21, 22 @ 4:29 pm:
Macon, see Joe Bidenopoulos 12:27 last paragraph. It’s very likely that both parties here have high priced execs whose bonuses could use a trim. JB and DOI can only do so much here. I don’t see the Department of Labor or the labor boards being taken to task when strikes occur whether private or public sector.