[T]he Vermont State Employees Association is demanding that Blue Cross Blue Shield pay performance penalties for the more than $20 million of claims that have not been paid on more than 6,000 total requests from state employees and retirees.
The VSEA’s Benefits Advisory Committee met with the insurance company after receiving numerous inquiries from members, retirees and staff about claims not being paid. The union found that more than 2,000 of those claims, totaling $10 million, are 30 days past due, meaning they will now accrue interest.
Blue Cross representatives blamed the matter on glitches in a new automated system installed in January that has been causing the delays. The insurer says the new operating system has made it difficult for the company to verify the accuracy of some claims. But the VSEA says in the meantime, the amount of claims going unpaid is “alarming.”
Vince Illuzzi, VSEA’s lobbyist, said he had claims that weren’t paid over a four-month period.
“It was significant,” Illuzzi said. “And what happens is at some point, the hospital expects payment, and they don’t care who it comes from. It can generate adverse credit reports even — not saying that happened, but it could.”
Illuzzi said he was just talking to a judge on the state health plan who has been getting “bills and charges” for things that he knew should have been covered by the insurance, causing him to have to go through the “rigmarole” of getting reimbursed.
“This is not unique to me,” Illuzzi said.
There are more than 25,000 employees on the state health plan. Dave Bellini, president of the VSEA, said he’s heard from dozens of people with the same complaint — that they are being charged for things that they shouldn’t be charged for. Bellini said he’s most worried about all the people who might be getting incorrectly charged, and not realizing the error, pay the bill that they did not owe — trusting Blue Cross to get it right.
“When they screw it up, they’re supposed to pay,” Bellini said. “And they’re screwing it up right and left. … We want the state to extract every dollar they can for them doing a lazy job. We’re sick of excuses. Get it right or we’ll get somebody else.”
He said he’s not sure how much the performance penalty for the unpaid claims would be, but that he guessed it would be “five or six figures for sure.”
“It’s easy to blame it on a computer system or transition, but they make a good deal of money. Those executives are getting paid a fortune,” Bellini said. “They should be getting it right.”
Benefits Advisory Committee members asked Blue Cross Blue Shield why a test run wasn’t conducted before implementing the new system, according to a VSEA email. Blue Cross said it did do a test run and thought the glitches had been fixed.
“Obviously they were not all caught and fixed,” the email noted.
So beginning on Jan. 1, the new system processed each claim submitted — up to the point of payment, at which time each claim was stopped for manual review. This led to “huge backlogs” in claim payments.
Members have reported some of their claims were incorrectly paid with the wrong co-pays, according to the VSEA. The union urged members to contact the Department of Human Resources to demand their claim be paid, and to “remind them that an unpaid claim can sometimes break a family financially.”
The insurer said in a statement that it is working to resolve issues as quickly as possible.
“BCBSVT is making every effort to minimize the impact of our technology upgrade on our customers,” the statement said. “We acknowledge that this process has caused confusion and delays. BCBSVT will continue to work diligently with customers, members and providers.”
Bellini said customer service at Blue Cross used to be “better than a concierge at the Waldorf Astoria” — it was actually one of the reasons the VSEA accepted the company’s bid. But ever since the problems started, he said it’s gone way downhill.
Blue Cross said it continues to work on fixes, but the VSEA is still worried about “easing the nerves of thousands of VSEA members and retirees waiting for their claims to be paid.”
Correction: An earlier version of this story misattributed comments made by VSEA President Dave Bellini to another association official.
