The office of New York Attorney General Eric Schneiderman today announced a $3.1 million settlement with Excellus Bluecross Blueshield.
The settlement requires the insurer to pay refunds plan members. Officials say the members overpaid health care providers as a result of improper accounting for deductibles at Excellus. Excellus said the accounting problems were due to a technology glitch.
The settlement also requires Excellus to properly account for members’ deductible and out-of-pocket expenses, to prevent similar improper denials of claims in the future.
Excellus has simultaneously entered into a stipulated agreement with the New York State Department of Financial Services (DFS) relating to the same allegations.
After Excellus denied claims, providers either billed the customers for the cost of the services or absorbed the losses themselves.
Excellus reported that these accounting errors – which affected 12,000 customers – were the result of a technology glitch that occurred after the company modified its software, according to the attorney general’s office.
As a result of these computer errors, claims processed after Sept. 1, 2011, were erroneously denied for failure to satisfy a deductible that had, in fact, already been met. Excellus’ accounting errors primarily affected members covered under high-deductible plans.
Excellus already has reimbursed the individuals who were affected and has corrected the computer software problem which caused some members to be overcharged, officials said.
“The department appreciates the opportunity to have worked with Attorney General Schneiderman’s office in resolving the issue,” New York DFS Superintendent Benjamin Lawsky said.
Generally complainant calls either come into the AG’s Health Care Bureau or to the DFS and an investigation is launched, if there is cause.
The AG’s Health Care Bureau also started an independent investigation into Excellus’ failure to properly track members’ deductible and out-of-pocket expenditures into its automated claims system following the receipt of customer complaints.
The company has already made payments to consumers and providers.
“My office will continue to look out for New Yorkers who face improperly denied health insurance claims and ensure that they are repaid the money they are owed. We are pleased that Excellus Bluecross Blueshield has refunded money to thousands of New Yorkers,” stated Attorney General Eric T. Schneiderman.
“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.
Excellus agreed to conduct outreach and ensure that all members who overpaid providers because of Excellus’s accounting error receive restitution, and to audit and monitor its claims processing procedures to ensure these problems do not recur, under the agreement, the AG’s office stated.
This investigation was handled by Assistant Attorney General Dorothea Caldwell-Brown, under the supervision of Lisa Landau, Health Care Bureau chief, and Janet Sabel, executive deputy attorney general for Social Justice.