Illinois Blue Cross Blue Shield Pays $25 Million to Settle AllegationsFacing allegations that they denied coverage to sick children in need of nursing,
Illinois’ biggest health
insurance company, Blue Cross Blue Shield, agreed to pay $25 million dollars to settle the dispute.
State Attorney General Lisa Madigan believes that Blue Cross unfairly denied legitimate claims and therefore put undue stress on the States Medicaid system. Blue Cross’ actions left the State on the hook for almost $12 million in medical fees.
Madigan and U.S. Attorney Patrick Fitzgerald investigated complaints by policy holders for several years before filing the civil claims.
The costs included private-nurses for sick children, claims that should have been honored under the guidelines outlined by the insurance policies. The claims were denied due to undisclosed, internal guidelines that were much more restrictive than those the consumers were made privy to.
Since Medicaid coffers are filled by both federal and state tax dollars the State of Illinois and the
U.S. Treasury will share the proceeds. $14 .25 million will go to repay the State for the medical expenses and $9.5 million will go to the Federal Government to reimburse Medicaid. The final $1.25 million will go to policy holders who were denied coverage.
Though they have agreed to pay $25 million to quiet the civil claims, Blue Cross Blue Shield continues to insist that they have done nothing wrong.
Jack Spegal, Illinois Blue Cross’ spokesman, defended the insurer by claiming that they expanded the explanations of their insurance claims benefits, in conjunction with the State Attorneys office, many years ago to make sure that their members understood the coverage involved in their insurance plan.
Just two days prior Blue Cross Blue Shield of Michigan reached a settlement due to a rates increase to over 200,000 customers (typically under the age of 65) who purchased their own medical insurance.