Hamm levies $30,000 fine against Blue Cross Blue Shield for contractual, marketing violations
Posted on 9/17/2009
BISMARCK, N.D.-North Dakota Insurance Commissioner Adam Hamm announced today that Blue Cross Blue Shield of North Dakota (BCBS) has been fined $30,000 for three violations, including failure to file contracts with the Department, failure to include certain provisions within provider contracts and using misleading information for marketing purposes.
BCBS failed to file its physician participation agreement with the Insurance Department, as is required by North Dakota law. The maximum administrative penalty of $10,000 was levied for this violation.
In addition, the physician agreement BCBS used until February 2009 did not contain certain provisions that are required by law. A second maximum administrative penalty of $10,000 was levied for this violation.
Finally, misleading statements regarding the amount of money the company pays out in health care claims and how much is used to pay for administrative expenses were found in multiple places, including the company's website, brochures, pamphlets and other marketing materials.
"These statements are misleading because they understate the amount being used to pay administrative costs," Hamm said.
The administrative penalty imposed for this level of violation was $10,000, the maximum. The total penalty imposed under the order was $30,000.
"Blue Cross Blue Shield has agreed to correct these violations and pay the $30,000 fine," Hamm said.
Hamm explained that these fines come after an extensive review of these issues which began in the fall of 2008, and are separate from the recently concluded target financial examination.