By Elizabeth D. Festa
The New York Attorney General’s office announced today a $3.1 million settlement with Excellus Bluecross Blueshield that required the insurer to refund plan members who overpaid health care providers as a result of Excellus's improper accounting of deductibles
, which the insurer said was due to a technology glitch.
The settlement also requires Excellus to properly account for members' deductible and out-of-pocket expenses to prevent similar improper denials of claims in the future.
Excellus has simultaneously entered into a stipulated agreement with the New York State Department of Financial Services (DFS) relating to the same subject matter.
After Excellus denied claims, providers either billed the customers for the cost of the services or absorbed the loss themselves.
reported that these accounting errors – which affected 12,000 customers – were the result of a technology glitch following modifications to its software, according to the AG’s office.
As a result of these computer errors, claims processed after Sept. 1, 2011, were erroneously denied for failure to satisfy a deductible that had, in fact, already been met. Excellus' accounting errors primarily affected members covered under its high-deductible plans.
Excellus has reimbursed the individuals who were affected and has corrected the computer software problem which caused some of its members, particularly those with high deductible plans, to be overcharged, the DFS said.
“The Department appreciates the opportunity to have worked with Attorney General Schneiderman's office in resolving the issue,” New York DFS Superintendent Benjamin Lawsky said.
Generally complainant calls either come into the AG’s Health Care Bureau or to the DFS and an investigation is launched, if there is cause.
The AG’s Health Care Bureau also started an independent investigation into Excellus' failure to properly track members' deductible and out-of-pocket expenditures into its automated claims system following the receipt of customer complaints.
The company has already made payments to consumers and providers.
“My office will continue to look out for New Yorkers who face improperly denied health insurance
claims and ensure that they are repaid the money they are owed. We are pleased that Excellus Bluecross Blueshield has refunded money to thousands of New Yorkers,” stated Attorney General Eric T. Schneiderman.
“An insurance policy is a two-way street. New Yorkers who live up to their end of the bargain by paying their premiums and deductibles deserve to have their insurance company live up to its promises by properly paying their claims,” Schneiderman said.
Excellus agreed to conduct outreach and ensure that all members who overpaid providers because of Excellus's accounting error receive restitution, and to audit and monitor its claims processing procedures to ensure these problems do not recur, under the agreement, the AG's office stated.
This investigation was handled by Assistant Attorney General Dorothea Caldwell-Brown, under the supervision of Lisa Landau, Health Care Bureau chief, and Janet Sabel, executive deputy attorney general for Social Justice.
Originally published on LifeHealthPro.com