Insurance company in North Dakota fined $60,000 for several violations

North Dakota Health Insurance
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Blue Cross Blue Shield must pay the penalty for claims handling issues and other payments failures.

Blue Cross Blue Shield of North Dakota recently agreed to pay a number of different fines that will come to a total of about $60,000, for having made several “systemic” violations that were discovered by regulators during an examination of the insurance company.

The violations have occurred in a range of different areas including the handling of claims.

Among the violations that were found within the examination of the insurance company were the claims handling, including the health plan coverage, and treatment for mental health and substance abuse. Moreover, a life insurer affiliated with Blue Cross Blue Shield failed to pay discounts to premiums that had been advertised.

The commissioner stated that he and his examiners were surprised by the extent of the violations by the insurance company.

North Dakota Health InsuranceThe insurance commissioner in North Dakota, Adam Hamm, said that he and his examiners had not been expecting the severity and scope of the violations that were discovered in the examination, which ran for a year. The compliance that was missed in areas that were central to actually providing coverage, said Hamm, included the coordination of the benefits, the handling of the claims, and in making representations of the products and services to customers that were truthful.

Hamm explained that “They’re all very serious,” and added that “My team and I were surprised during the course of the examination by the type of violations that were found and the number of violations that were found.” The commissioner also said that the fines that were issued were the maximum legal allowable amount.

If Blue Cross Blue Shield of North Dakota had been an insurance company that was operating for profit, then the fines would have been even harsher. However, the fines against the insurer would be paid from funds in the North Dakota Blues surplus, which is a nonprofit of which the policyholders themselves have ownership. Hamm pointed out that his department intends to monitor the insurer very carefully to make certain that the necessary changes will be made. This way, they will know that “customers are treated fairly going forward.”

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