The state's leading private health insurer has been hit with a fine for improperly denying some mental health and substance abuse claims and for failing to report suspected fraud cases. After a 15-month investigation, insurance regulators have fined Blue Cross Blue Shield of North Dakota $125,000.

In addition to paying the fine, the company has agreed to hiring a new compliance chief to be part of its executive team, and have told the North Dakota Department of Insurance they will correct the problems outlined. The insurer said some of those problems have already been addressed. They have also stated they are investing more than $300,000 to correct problems identified in the examination.

BCBS covers 65 percent of the state’s group market and 86 percent of the individual market. The investigation arose after consumers and providers filed complaints about claims being mishandled. Among those complaints were concerns that mental health claims were not being treated the same way as claims for other medical services, despite a  2008 federal law requiring it to establish parity of treatment. This often took place in the form of extra paperwork, which led to delays.

Jeff Ubben, deputy insurance commissioner, told the Bismarck Tribune that some of the improper denials included partial coverage opposed to out right denials. For example, outpatient treatment may have been approved but inpatient treatment was not.

As for the penalty for failing to report suspected fraud cases, BCBS says that was caused by procedural error. Tim Huckle, the North Dakota Blues president and CEO, told the Tribune his company was gathering information to determine if the suspected fraud cases could be substantiated. From now on they will report suspected fraud cases immediately, he said.

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