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Health Insurance

BISMARCK, N.D. – Insurance Commissioner Jon Godfread today issued a Consent Order finalizing a yearlong market conduct examination of Blue Cross Blue Shield of North Dakota (BCBSND). This examination was called as part of the North Dakota Insurance Department’s ongoing and routine investigations into North Dakota domestic health insurance companies. The Department generally conducts these examinations every five years. 

The examination investigated and found violations in the following areas: mental and behavioral health and substance abuse claims, including parity; telehealth services coverages and claims; independent external review assignment and procedures; policy form filing; coordination of benefits, insurance fraud reporting; and operational governance and governance of subsidiaries.

“The results of the market conduct examination report of Blue Cross Blue Shield of North Dakota made it clear that some important changes need to be made to the way they do business,” Godfread said. “Blue Cross Blue Shield of North Dakota has committed to me that they will immediately begin working to fix the issues found during the examination. I have already seen positive actions taken by the company since the Department identified these issues.” 

The examination found deficiencies in how BCBSND processes mental health and substance abuse claims, and that the company’s preauthorization process was not in compliance with the law.

“As our largest health insurance carrier, many North Dakotans rely on Blue Cross Blue Shield of North Dakota to obtain access to mental health and substance abuse treatment,” Godfread said. “The issues we have identified in this examination are being immediately addressed and corrective action is being taken to make sure addiction and behavioral health services are being covered appropriately.” 

The examination also found that the company was not allowing for independent external reviews for grandfathered plans, failed to provide telehealth services in accordance with the law, violated policy form filing laws, failed to process coordination of benefits claims correctly, and failed to report acts of suspected insurance fraud to the Department as required by law. 

Godfread has fined BCBSND $125,000 for its violations and the company has committed to implementing several corrective action plans going forward which will be reviewed and approved by the Department. 

“Blue Cross Blue Shield of North Dakota is thankful for the efforts of the North Dakota Insurance Department and the collaborative nature in which it conducted this comprehensive market conduct examination,” Tim Huckle, BCBSND President and CEO, said. “As with every examination, Blue Cross Blue Shield of North Dakota appreciates the opportunity to learn about the ways we can enhance our internal operations in this evolving environment. The health insurance industry continues to grow significantly more complex and this review reveals that we can do more to ensure its compliance in this highly regulated environment.”

In addition to paying the regulatory fine, BCBSND expects to invest more than $300,000 to address issues identified through resources and tools, supplementing recent investments made in new enterprise technology. Huckle added that these costs will not be passed along to BCBSND members in the form of higher premiums as they plan to fund them through reductions and efficiencies within their current administrative budget. Along with directing investments into enhanced operational compliance, BCBSND has also been directed to conduct an independent audit of these findings in the next 12 months. Those results will be shared with the Department and any deficiencies will be addressed at that time. 

“Throughout the yearlong examination process, Blue Cross Blue Shield of North Dakota has been cooperative and proactively looking to implement changes that should enhance its services to North Dakotans,” Godfread said. “Our goal has and will continue to be compliance and improved customer service. While the nature of these findings are serious, I am confident that with the investments made by Blue Cross Blue Shield of North Dakota and the continued oversight by the Department, we will see continued improvement from our largest health insurance carrier. The result will be better service to North Dakotans without adding to the rising cost of health insurance.”

The market conduct examination report can be found on the Department website at www.nd.gov/ndins/market-conduct-reports.

Consumers with questions about the claims process or how they are being covered are encouraged to contact the Department at (701) 328-2440 or insurance@nd.gov.

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