Blue Cross, HMO Colorado fined by state

Tuesday, August 12th, 2008

Denver Business Journal – by Bob Mook

Anthem Blue Cross and Blue Shield of Colorado and an affiliated company were fined a total of $542,500, Insurance Commissioner Marcy Morrison said Tuesday.

According to a statement from the Colorado Department of Regulatory Affairs, Anthem Blue Cross and Blue Shield and its wholly owned subsidiary HMO Colorado Inc. were ordered to pay $290,000 and $252,500 respectively, for violating market regulations

The insurers paid the fines on Aug. 1.

The fines were the result of a market-conduct examination for the year 2006 which found that — among other things — the insurers failed to maintain required records, failed to provide coverage to newborns in some cases and didn’t properly implement processes for terminating policies. The insurers also failed in some instances to pay, deny or settle claims within the time frames required by law.

Anthem failed to properly define its terms and in some cases did not provide written denials of coverage or provide reasons for denial.

HMO Colorado Inc. also was cited for not disclosing policies for obtaining emergency medical services.

“We have made it clear that our mission is to protect consumers and this market-conduct examination and resulting fine reflects our commitment,” Morrison said in a statement.

Sally Vogler, a spokeswoman for Anthem Blue Cross and Blue Shield, said the insurer worked closely with Morrison during the exams and is working to improve some of the concerns that resulted in the fines. She attributed many of the violations to technical difficulties associated with converting to a new data system between February and December of 2006.

While the new system designed to give consumers faster, more accessible and more accurate information to benefits, Vogler said that “conversions of this nature are extremely complex.”

She also said Anthem has already corrected 95 percent of the issues identified in the insurance commissioner’s report.

“Anthem is committed to complying with all laws and regulations that govern our industry,” Vogler said. “We look forward to our continued partnership with the commissioner and her staff and to providing access to affordable, quality health care benefits to our members”

 

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