Excellus Blue Cross Blue Shield has agreed to pay $250,000 in fines—$125,000 apiece to the State Attorney General’s office and the Department of Financial Services—for wrongly denying claims of some 12,000 subscribers.
The fines, announced Wednesday by state Attorney General Eric Schneiderman, come on top of $3.1 million the insurer repaid last year to patients, doctors and other providers who were improperly charged for services that should have been covered by their plans after the Blues failed to properly account for already met deductibles.
In some cases, patients paid providers for the denied amounts. In others, providers absorbed the cost. Most subscribers hit with the erroneous charges were enrolled in high deductible plans.
“An insurance policy is a two-way street. New Yorkers who live up to their end of the bargain by paying their premiums and deductibles deserve to have their insurance company live up to its promises by properly paying their claims,” Schneiderman said in a statement.
James Redmond, regional vice president of communication and community investment at Excellus, blamed the accounting error on a glitch that happened in a transfer to new software that caused it to deny claims even though deductibles were met.
“From the time we discovered that our computer system was miscalculating some of our members’ deductibles, we have worked to make our customers financially whole. We were addressing this long before discussions with the attorney general. In fact, we self-reported the problem to the state in the first place,” Redmond said in an email.
Excellus believes it has reviewed all affected claims and reimbursed all affected subscribers and providers but also plans to send out letters in January offering further assistance to any who think they still might have an unresolved claim, Redmond said.
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