RALEIGH — N.C. Insurance Commissioner Wayne Goodwin on Thursday fined Blue Cross Blue Shield of North Carolina $3.6 million as part of a voluntary settlement agreement, according to a statement released by his office.
Goodwin’s office said the N.C. Department of Insurance has received numerous complaints from BCBSNC customers since January, which included the following allegations:
• that BCBSNC customer service department was not readily available by telephone or through its website;
• that consumers did not receive valid identification cards or proof of coverage;
• that consumers experienced problems in billings and crediting of premium payments;
• that consumers experienced incorrect policy cancellation notices and difficulty obtaining premium refunds due; and
• that consumers did not receive timely notices of renewal of their policies with explanations of coverage changes.
In the agreement, which was made public, the insurance company denies violating any statues or regulations, and entered into the agreement “in order to compromise disputed allegations and to avoid the uncertainty, distractions, and expenses of litigation.”
However, BCBSNC acknowledges “that, in some instances, it failed to timely provide identification cards, experienced errors in invoices and billing, and faled to respont to the NCDOI on a timely basis in early 2016, which (the company) contends resulted from technology failures.”
The agreement also shows that BCBSNC “represents that it has corrected the technology failures that it contends caused the problems…has made restitution to policyholders in at least the amount of $11.3 million; and… has made interest payments on claims made by health care providers in at least the amount of $8.3 million.”
If the company had been found guilty of violating state statues or code, it could have had its license revoked or suspended, according to the agreement.
“We’ve reviewed the Department of Insurance’s voluntary settlement agreement and are prepared to pay the amount for our technological problems,” read a statement released by the company. “We have been actively addressing these issues, and expect to be stronger as a result of this process. We remain committed to our customers and the communities of North Carolina, and are deeply sorry for the challenges that this created for our customers and providers.”
The DOI says it will continue to assist consumers as needed.
“As your Insurance Commissioner, and an advocate for consumers across North Carolina, Blue Cross Blue Shield had to be held accountable,” said Commissioner Goodwin. “A record fine has been paid.”
The $3.6 million will come from BCBSNC surplus and will not affect any customer premiums which is laid out in the voluntary settlement agreement, according to Goodwin’s office. This is the largest fine the North Carolina Department of Insurance has ever levied and almost double the previous largest amount against a single company.
The agreement also stipulates that the civil penalty will be disbursed for the benefit of North Carolina’s public schools, in accordance with the state constitution.
The agreement was signed by Commissioner Goodwin and J. Bradley Wilson, BCBSNC president and CEO, on Thursday.
Goodwin, who also serves as the state fire marshal, is a native of Hamlet and previously served in the N.C. House of Representatives.