Blue Cross Blue Shield of Texas has agreed to repay consumers after state regulators found the health insurance company was mishandling out-of-network emergency claims and providing incorrect information.
“Consumers who had higher out-of-pocket costs due to the errors will get refunds,” Texas Insurance Commissioner Kent Sullivan said in a statement Friday. “Ensuring the fair treatment of consumers and clear, timely consumer information are priorities for TDI.”
The Texas Department of Insurance also announced the health insurance company will pay a $10 million fine.
“There were significant issues and the fine reflects that,” Stephanie Goodman, a spokesperson for the agency, told KUT.
According to Goodman, regulators received numerous consumer complaints, including problems dealing with out-of-network claims for emergency care. Hospitals sometimes bill patients for the difference between what they charge and what the insurer is willing to pay for care from an out-of-network doctor. This is commonly known as balance billing.
“We received complaints from some consumers on a couple of different issues and noticed patterns there,” Goodman said.
The agency said it found there were delays in BCBS of Texas processing out-of-network claims “that went through an Emergency Benefit Management review process the company began using in August 2018.”
A review also found “incorrect information in consumer notices and marketing materials.” For example, about 450,000 people got marketing material in 2018 and 2019 that had wrong information about things like prices and coverage.
Goodman said between 90,000 and 100,000 people received an explanation of benefits that had incorrect information, too.
An explanation of benefits is a common consumer notice that is supposed to tell consumers they can’t get balanced billed and/or tell them how to address the issue if they are. This information was particularly crucial in the past few years, because until recently, consumers had to deal with these bills on their own.
“Before, the burden was more on consumers and that notice was critical,” Goodman said.
By law, consumers with HMO plans, specifically, are supposed to be told they cannot be billed at a higher price for out-of-network care for emergencies. However, BCBS of Texas didn’t provide that information to those consumers in their explanation of benefits, which left them in a bind when they got a surprise bill.
A new state law kicked in just this year that outlaws the practice of balance billing for people with state-regulated health plans. Congress is considering legislation outlawing the practice of surprise billing for people with federally regulated plans.
Goodman said the TDI review predates the new state protections from consumers, which is why the state has fined Blue Cross Blue Shield of Texas.
BCBS of Texas was ordered to reach out to the people who got all this misinformation. The company agreed to begin sending those consumer notices by May 1. Consumers have 60 days to respond to those notices and possibly get a refund.
These refunds, however, only apply to people with state-regulated plans – which largely excludes people with employer-sponsored plans. However, Texans who bought their BCBS of Texas plan through the ACA marketplace, likely qualify for a refund if they were balance billed.
Goodman said if folks are curious about whether they qualify, they should call the number on the back of their insurance card.
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