State insurance claims payments delayed by Blue Cross

Blue Cross and Blue Shield letters to the state
Blue Cross and Blue Shield letters to the state

Doctors, hospitals and other providers aren’t getting paid for the care they deliver to a quarter-million state employees and retirees insured through the Office of Group Benefits.

Blue Cross and Blue Shield of Louisiana recently took over, in a private contract, the management of the agency that had overseen health care coverage for state employees and retirees.

Blue Cross notified the state by letters that payments would be delayed while computer programs were upgraded.

Patients should not be affected, according to Blue Cross, but physicians and health care providers may not get paid for six to eight weeks.

The computer alterations deal with health plans benefit changes made by the state agency and were finalized Dec. 11, according to a letter from Brian Keller, a senior vice president of Blue Cross and Blue Shield of Louisiana.

Blue Cross also partly blamed adjustments needed to comply with the federal Affordable Care Act.

Greg Waddell, director of legal affairs for the Louisiana State Medical Society, said the payment delays are going to pose a cash-flow problem for some physicians who bill weekly or biweekly.

“Four to six weeks to get claims paid, that can become problematic,” Waddell said. “The other obligations of a physician’s office don’t get put on hold.”

Blue Cross asked the Jindal administration for a waiver of penalties that would normally be due for untimely payment of claims.

Blue Cross got a state contract in late 2012 to manage Group Benefits’ preferred provider organization, health maintenance organization and Consumer Driven Health Savings Account.

The plans cover about 250,000 current and retired state employees and their families, most of whom live in the Baton Rouge and New Orleans areas.

Paying the bills submitted by doctors and other health care providers had been handled by employees of the state agency Office of Group Benefits.

The Jindal administration privatized the work, citing a cost savings. Blue Cross stands to make $37.8 million annually to serve as administrator.

“We are working closely with (Blue Cross/Blue Shield), and if this impacts Blue Cross’ ability to meet its performance standards for claims processing time as required in their contract, we will apply the appropriate penalty,” wrote Doug Baker, a Jindal administration spokesman, in an email response.

Baker said 2013 claims are being paid, just not new ones filed for 2014. There will be no disruption in services to members, he wrote.

Late Monday, Baker said all of the problems and changes were caused by the Affordable Care Act. He said the state made no other alterations in the plans that had any effect on the situation.

Blue Cross and Blue Shield of Louisiana’s communications chief, John Maginnis, also blamed the Affordable Care Act mandates, though that was not mentioned in Blue Cross’ initial letter seeking a waiver of contract requriements.

The second letter to the state mentioned both the Affordable Care Act and the finalization of the benefits plans.

“There are many, many things that have to be done to bring all our customers into compliance with (the Affordable Care Act). OGB is not the only area that has challenged us,” Maginnis said. “It’s a very difficult situation for all health plans.”

Waddell said he understood the problem developed because of “late communication from the state about what (insurance) benefits were going to be.”

Blue Cross’ request for delay came in a Dec. 30 letter from Keller to Charles Calvi, the chief executive officer at the Office of Group Benefits, in which he outlined the problem meeting contract requirements.

Maginnis said payments are just being delayed, not denied.

He said Blue Cross is hoping to have the issues resolved by early February.

“We have got a lot of people working around the clock to rectify the delay,” Maginnis said Monday. “We are working with our providers because they are also affected.”

Calvi refers to changes in Office of Group Benefits-offered health insurance plans approved by OGB management on Dec. 11.

“The requested benefit changes for 2014 are variations of the member out-of-pocket maximums and will require significant work by our teams to build, test and deploy,” Keller wrote. “The requested changes will likely take 6-8 weeks before we can accurately process claims. During this time period we feel it necessary to delay claims payments for services rendered in 2014.”

Keller also advised that the work would be needed to ensure proper handling of eligibility issues and ID card generation for new members and/or member changes after Jan. 1.

After a meeting with Office of Group Benefits officials, Keller wrote a Jan. 10 letter detailing what had to be done and the timeline necessary “to make the appropriate system changes.”

“This is to (ensure) proper processing and payment of OGB member claims as well as compliance with ACA requirements and the 2014 Benefit Plans finalized and approved on Dec. 11, 2013,” he wrote.

Keller said work is scheduled to be completed by Feb. 15. But, he said, “a claims ‘pay-hold’ will remain in effect until all claims can be adjudicated correctly.”