[B]lue Cross Blue Shield of Vermont is prepared to bill the state for millions of dollars in past-due premiums, according to a letter the company sent to state officials last month.
BCBSVT, Vermont’s largest health insurer, has more than 90 percent of the state health exchange’s individual market, nearly 35,000 plans.
In a March 5 letter to the state, which was provided to VTDigger, BCBS said it expects that $3 million to $5 million in past due premiums from 2014 “will never be collected,” and the company would be billing Vermont Health Connect for the final amount due at the end of March.
A BCBS spokesman said Wednesday that while the company has not yet billed the state, its intention hasn’t changed. The situation could be avoided if BCBS and the state are able to reconcile their accounts, said Kevin Goddard, BCBS vice president for external affairs.
Much of the $3 million to $5 million is related to accounts that customers canceled with VHC, but the exchange never communicated that to the insurer, according to a state official. That continues to happen because the technology to do so was never developed. Instead, the state had to rely on error-prone manual workarounds. In addition, there are millions of dollars being held by a third-party payment processor that could partially close the gap.
There are still about 1,000 cases from 2014 that are unresolved, representing $1.8 million, said Lawrence Miller, the state’s chief of Health Care Reform. If the rate of canceled accounts versus unpaid bills holds, the amount BCBS will be owed from last year will be “nominal,” Miller said.
Goddard was not as sanguine.
“What this ends up being at the end of the day is still unclear,” he said.
VHC and the insurer both say they are not in dispute over payments, and are working to reconcile the outstanding balance.
At the same time, BCBS has another $9 million and counting in past-due premiums for 2015, stemming largely from backlogs and billing issues that have plagued the exchange since its launch, according to the letter. The process of reconciling the insurance carriers’ books with those of the exchange for 2015 is one that “needs to get underway,” Miller said Wednesday.
The same issues putting a hole in the BCBS balance sheet have caused hardship for customers who have tried unsuccessfully to change plans, cancel a plan, add someone to a plan or make a payment.
In one example from December, a Tunbridge woman said she drove through a snowstorm and paid $500 out of pocket for prescription medication her chronically ill son needed after her BCBS coverage was rejected for lack of payment. She had recently sent VHC a check for two months’ worth of premiums, and though the check was cashed, her insurer had not received the money.
“This is really about Vermont Health Connect, its functions working properly and efficiently so Vermonters can be assured they’re getting the coverage they’re enrolled in, and the premiums they pay are applied to that coverage,” Goddard said.
In its letter, BCBS says that less than 5 percent of customers renewed in 2015 who requested product or coverage-level changes were processed at that time. For people who submitted a change request after their renewal, less than 1 percent were processed. In total, more than 12,000 customers have pending changes, a backlog that could take “several months” to clear. Vermont Health Connect has had ongoing backlog issues for more than a year.
BCBS asked that the state pursue one of two temporary fixes. Either VHC could “advance” the insurer millions in unpaid premiums, until the accounts are reconciled, or VHC and its payment processor, Benaissance, could end the practice of not remitting payments due to “billing discrepancies” or “partial payments.” Customers in the exchange make payments to VHC, which are then aggregated and sent by Benaissance to the carriers.
Benaissance is holding roughly $5 million in Vermonters’ premium payments, according to Miller, though he stressed that’s a moving target.
That’s because VHC and Benaissance have a “no-cents-off policy,” whereby payments from customers that are off by as little as a dollar are held until the customer pays up. Miller said it would be “entirely reasonable” to change that policy, but it would require recoding in the various systems involved.
Reconciliation between VHC and the carriers should happen monthly, Miller said, and that function will be partially enabled by the May 31 release of new technology, which is also expected to automate the process for changes to people’s coverage or information. Miller and Goddard said if that is successful, much of the current problem will be alleviated.
In a March 10 response to the BCBS letter, Miller writes that there are 2,900 open cases from 2014, and of 481 cases closed the previous day, 78 percent were cancellations.
There were 1,000 more cases to go, representing $1.8 million, as of the most recent report Miller received several days ago, he said. If the cancellation trend holds, the remaining unpaid accounts on BCBS’ balance sheet could fall within normal levels for delinquent payments, he said.
That may explain why BCBS hasn’t sent the state a bill. However, it’s unclear who would be liable for those unpaid accounts or claims BCBS paid for people with canceled accounts, something Miller acknowledged is likely happening in some cases.
“We’ll have to work with the carrier and the customer on resolving those,” Miller said.
But who’s ultimately liable?
“I think that’s going to be done on a case-by-case basis,” he said.
The letters were provided to VTDigger by the anti-single-payer advocacy group Vermonters for Health Care Freedom, which obtained them through a public records request. VTDigger also requested those letters but has not yet received them from state officials.
More about the exchange’s performance will be learned Thursday, when Auditor Doug Hoffer is expected to release a much-anticipated analysis.
CORRECTION: The headline posted on Aug. 16 incorrectly cited a dispute between BCBS and VHC.