Maine Superintendent Orders Restitution to Enrollees and Providers; Fines Anthem BC/BS of Maine

Maine Superintendent of Insurance Alessandro Iuppa announced that Anthem Blue Cross/Blue Shield of Maine and its subsidiary, Maine Partners Health Plan, have been fined $250,000 and $100,000 respectively for reportedly failing to pay interest on claims that were not paid within the time frame established in Maine law.

Anthem and its subsidiary must also pay more than $1.2 million in interest to over 387,000 claimants (including enrollees and providers) to correct the violations that occurred over a 30 month period of time.

“Maine law requires that when a claim is no longer disputed, payment must be made within 30 days; otherwise, interest on the claim is owed. Such violations of Maine’s Insurance Code will not be treated as just another cost of doing business,” stated Iuppa. “The State takes the indiscretions of licensed carriers seriously whether the result of honest misunderstandings or intentional wrongdoings.”

The Maine Bureau of Insurance is planning similar examinations of all domestic health maintenance organizations to determine if claims are being paid promptly and, if not, if interest is being paid. Anthem was the first company examined.

In addition to the claims payment issue, the consent agreement entered into between the Superintendent and Anthem resolved three other reported violations. One issue was Anthem’s failure to pay claims for out-of-network providers at a higher level when no in-network provider was available within the enrollee’s service area.

Anthem agreed to an extensive process to identify all enrollees and providers who may have been reimbursed less than what they were entitled. Once the enrollees and providers entitled to reimbursement are determined, Anthem will pay the difference between what the enrollee or provider was paid and the amount the enrollee or provider was due. Although the total amount Anthem will be required to reimburse cannot be ascertained until the insurer completes the claims process, the amount is expected to exceed $100,000.

Another aspect of the consent agreement addresses reported violations of Bureau of Insurance Rule Chapter 940 brought to Superintendent Iuppa’s attention by Anthem at its 2002 Health Choice rate hearing. Anthem informed the Superintendent that it had inadvertently been charging premiums that did not meet the requirements of Bureau of Insurance Rule Chapter 940 which prohibits carriers from charging rates for health insurance that is more than the difference between the two closest deductibles. For example, the difference in annual premium between a plan with a $250 deductible and an otherwise identical plan with a $500 deductible may not exceed $250.

In 2001, 2002 and the first three months of 2003, Anthem reportedly charged some rates that violated Rule Chapter 940 and caused some enrollees to pay excessive premiums. Anthem has agreed to refund more than $250,000 in overpayments to these Anthem enrollees.

The final violation addressed by the consent agreement involved Anthem’s reported failure to register three of its health plans as preferred provider organization products. Anthem has now properly registered the products with the State and has agreed to a civil penalty of $1,000.

“Anthem cooperated fully throughout this process,” Iuppa stated. “With the adoption of this consent agreement today, a minimum of $1.4 million will be returned directly to those Maine citizens who are affected and another $353,000 in civil penalties will be allocated to the State’s general fund.”

Anthem will be notifying customers who are entitled to payments.