Eight months into an insurance company’s contract to manage the most popular plan for state employees and retirees, doctors are waiting to be paid for their work.
One retiree said her doctors have gone unpaid for 18 medical visits this year. Another doctor’s office said it’s still waiting on bills submitted as far back as January, the month that Regence BlueShield took over administration of claims for the state’s Uniform Medical Plan.
“They just say they’re sorry, but they’re backlogged,” said Ali Crane, a manager of two Olympia medical practices who has tried to wring payments out of Regence. “Why weren’t they ready? Why did they get the contract?”
The state has budgeted $33.4 million to pay Regence for the first year of a four-year contract to manage claims for the plan’s 190,000 members.
The delays affect the subset of those members who use the state insurance as a supplement. Mainly, those are retired state employees on Medicare, about 40,000 of them.
Regence told the state this month that it hoped to clear up the backlog of nearly 300,000 claims in 90 days, said Health Care Authority administrator Doug Porter.
He said the company planned to add as many as 80 staff members, after originally underestimating the staff hours it would take to process claims. There are plans to do more automation of claims. And Regence told Porter that it would start making payments to providers even if the amount owed must be estimated and corrected later.
“We are committed to bringing the claims inventory back to normal levels as quickly as possible,” Regence said in a written statement Friday.
Porter sees Regence as “on the right track now” with more oversight from the state – but he also said company officials have repeatedly assured his agency before that a fix was imminent.
Meantime, Regence faces penalties for missing targets set out in the contract. The Health Care Authority said dollar amounts won’t be calculated or collected until year’s end.
Regence’s statement said the company has “been in communication with providers to keep them updated on the situation.”
Crane, however, said she can’t get specifics on the reasons for the roughly $3,500 in unpaid claims to Dr. Kathleen Hurd, one of the doctors whose practice Crane manages. At first, she said, she had no information except patient billing forms that wrongly indicated the wait had to do with rules for making sure patients with multiple insurers don’t trigger double payments.
Crane’s practices have kept patients out of the matter, she said. But Porter said some medical providers, unable to get the money from Regence, have turned to their patients.
“We’re hearing from retirees that their providers have not been paid, and the bill is being sent to the retiree,” Porter said, “which I think is grossly unfair and unreasonable.”
Retiree Crystal Hanisch hasn’t been billed, but she has felt like she had to explain the problem to the doctors: her dermatologist, her physical therapist, her primary care doctor and more.
She has good relationships with all of them, Hanisch said, but she has worried they eventually will have to turn away Uniform Medical patients.
“My big concern was, are we going to lose our doctors, and what happens to our credit in the meantime?” she said.
The Auburn resident retired in 2006 from an office job at Echo Glen Children’s Center for juvenile offenders and kept the state plan as a supplement to her Medicare. This is the first time she’s had problems with Uniform Medical in two decades with the plan, she said.
Porter said the Health Care Authority decided to contract out payments to a new company – before he took over the agency – with the idea of redefining “the proper role of state government in the health care marketplace.”
Porter declined to say if officials were rethinking the contract, but state lawyers are poring over the document to hold Regence to its requirements, he said.
In hindsight, Porter said, not enough time was given to prepare for the changeover, at least for the Medicare claims.