Sept. 4, 2007: Blue Cross Blue Shield of North Dakota (BCBS) submits a rate increase request of 17.3 percent to the Insurance Department for group policies.
Oct. 24, 2007: The Insurance Department notifies BCBS that it will not approve a 17.3 percent increase in the group major medical business, but will approve a 9.9 percent increase. In its rate increase request, BCBS included a 5.6 percent increase in payments to health care providers.
In the same notification letter, the Insurance Department communicates its intention to carefully monitor the accuracy of BCBS' assumptions provided in connection with rate increase requests, as well as requesting specific information regarding claim experience and payments to health care providers in order to compare actual results to the assumptions used in the request.
May 6, 2008: BCBS submits a rate increase request of 14.8 percent to the Insurance Department for individual (Bank Depositor) policies. The rate increase request includes a 5.6 percent increase in payments to health care providers, identical to the 5.6 percent increase for group policies.
May 29, 2008: BCBS notifies participating health care providers of reduced payments effective for services on or after Aug. 1, 2008. The letter states that the reduction will not exceed 2.5 percent.
June 18, 2008: BCBS verifies via email that the reduced provider payments apply to the individual policies.
June 24, 2008: The Insurance Department sends a letter to BCBS asking for more detailed information related to the provider payment reduction because it affects the cost assumption used to attempt to justify the rate increase requested. The Department specifically requests a detailed explanation of the decision to implement a reduction in payment. BCBS is given until July 1 to respond.
June 30, 2008: BCBS notifies the Department that it is unable to respond to the request by July 1.
July 3, 2008: BCBS responds to the Department's June 24 letter with incomplete information.
July 18, 2008: The Insurance Department announces that it has disapproved BCBS' rate increase request due to unreliable assumptions, a lack of information and that the benefits provided under these policies are unreasonable in relation to the premiums.