UPDATED: Blue Cross Blue Shield fined $30,000 for violations; company issues statement in response

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UPDATED 11:35 a.m.

BISMARCK – Insurance Commissioner Adam Hamm announced today that he has fined Blue Cross Blue Shield of North Dakota $30,000 for violations including using misleading information for marketing purposes.

The Blues failed to file its physician participation agreement with the North Dakota Insurance Department, as required by law. The resulted in a $10,000 administrative penalty, the maximum.

Also, the agreement with physicians failed to contain certain provisions required by law, resulting in a second $10,000 maximum fine.

Finally, regulators found that the North Dakota Blues misstated their administrative costs, resulting in a third maximum $10,000 fine.

The fines follow an extensive examination by Hamm’s department into expenses. The Blues have agreed to correct the violations and pay the $30,000 in fines, Hamm said.

In a statement issued by the Blues this morning:

"BCBSND agreed to pay the fine for technically failing to file a physician agreement (also called a provider contract) and failing to include premium taxes as part of total premium equivalents in marketing materials.

"In October 2008, the Department of Insurance requested BCBSND provide a copy of the physician agreement and evidence that it had been filed. BCBSND conducted a search and was unable to find evidence that the contract had been filed with the DOI. The physician agreement was originally written and presumably filed more than 40 years ago under the regulations at that time. BCBSND then provided a copy of the physician agreement to the DOI on October 29, 2008, and updated the language in the agreements as requested by the department. The new language went into effect in February 2009."

For more details read Friday’s Forum.

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