Problems with medical bills at Washington’s biggest insurance company affect more than just state employees and retirees, the state’s insurance commissioner says.
Yes, Regence Blue Shield’s biggest worry likely remains its backlog of nearly 300,000 unpaid claims for patients using the state government insurance plan it manages.
But regulators have a litany of other complaints, and Insurance Commissioner Mike Kreidler has ordered parent company Regence Group to develop a plan for fixing what he says is a pattern of errors. He and fellow regulators from Oregon, Utah and Idaho met Sept. 1 with Regence CEO Mark Ganz.
For example, Regence’s computer system malfunctioned Aug. 5, causing about 6,400 billing errors in the four states, Kreidler said. Money was removed from the wrong people’s bank accounts, he said – and in more than 200 cases in Washington, the accounts belonged to people who weren’t even Regence customers.
“The Regence Group needs to get its act together,” Kreidler said in a statement.
The Democratic insurance commissioner’s office said it levied two recent major fines against Regence: $100,000 for refusing to pay for removal of women’s contraceptive intrauterine devices and $125,000 for violations including not paying for prostate-cancer screenings. Kreidler also tangled with the company last year over its decision to stop selling child-only health policies.
Before deciding on any fines this time, regulators will wait to see if problems are corrected, Kreidler said. As a last resort, the office has the power to take administrative control of the company, but it would be an unprecedented step and a logistical challenge, he said.
“They claim that they’ve corrected a lot of these problems, but we need verification,” Kreidler said in an interview.
A Regence spokeswoman declined interviews. In a statement this week, the company blamed the problems on “a one-time system change at the beginning of the year, as well as a number of recent benefit changes under health care reform.”
“While these issues are temporary, we deeply regret that we have fallen short on our service commitments to a small portion of our more than 1 million members, as it is our goal is to fully serve ALL of our members ALL of the time,” the company wrote.
STATE CONTRACT
Regence has about 1.3 million customers in Washington. Its ranks grew in January when the company took over administration of the state’s most popular health insurance plan for employees and retirees, the Uniform Medical Plan. The state has a four-year contract with Regence worth as much as $33.4 million in its first year.
Some doctors have not been paid for treating retirees who use the state plan as a supplement to Medicare. With prodding by the Retired Public Employees Council of Washington, state officials have pushed for the company to move faster.
Regence told the state Health Care Authority in August it would add more staff and aim to clear up the backlog within 90 days. Authority director Doug Porter said the insurer has a strategy for reducing its backlog to about 82,000 claims by November.
Regence also has taken extra time approving mental health therapy and treatment for a smaller number of patients on the Uniform Medical Plan.
Porter said there are reports of the company taking six times as long as it should to review psychiatric treatment plans. There’s a backlog of about 1,600 cases, according to the authority, but that number is shrinking.
Earlier this year, some patients requesting intensive psychiatric care were being automatically denied, Porter said.
Regence miscalculated the number of employees it would take to manage the state plan, said Lucy Homans, director of professional affairs for the Washington State Psychological Association.
“They simply didn’t have enough employees doing the claims processing,” Homans said.
Among other problems cited by the insurance commissioner:
• Authorizations to do surgery being withdrawn less than three days before the scheduled operation.
• Poor customer service, including giving patients the runaround when they call a customer-service number.
• The bank withdrawals, some of which Kreidler said depleted the wrong accounts of thousands of dollars.
Some of the bills contained Regence customers’ names and identification numbers, disclosing them to the wrong people.
The billing errors probably were caused by inaccurate routing numbers, Kreidler said. Regence told his office the money was returned and the company would pay any bank fees triggered by the withdrawals.
Jordan Schrader: 360-786-1826
jordan.schrader@thenewstribune.com
blog.thenewstribune.com/politics
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