Insurer slapped with record $3.6 million fine

Insurer slapped with record $3.6 million fine

Insurer slapped with record $3.6 million fine Months of investigation and negotiation between the North Carolina Department of Insurance and the state’s Blue Cross Blue Shield provider has ended in a record penalty for the insurer.

Blue Cross Blue Shield of North Carolina will pay $3.6 million as part of a voluntary settlement agreement for IT problems that caused excessive delays and poor customer service for both policyholders and providers. The money will come from the insurer’s surplus and will not affect customer premiums.

Blue Cross suffered a catastrophic software failure in January when it was in the middle of transferring 400,000 customers from an older system to a new platform. By February, the North Carolina Office of the Insurance Commissioner had received more than 1,000 formal complaints related to Blue Cross and took more than 4,000 calls from disgruntled customers, state Insurance Commissioner Wayne Goodwin said.

Goodwin announced an official investigation into Blue Cross that month, to determine why the software issue had not been resolved in a timely manner.

The $3.6 million fine – the highest ever leveled against an insurer in the state’s history – is on top of $11.3 million Blue Cross paid to customers in restitution and at least $8.3 million paid to providers in interest from late reimbursements.

“As your insurance commissioner, and an advocate for consumers across North Carolina, Blue Cross Blue Shield had to be held accountable,” Goodwin said. “A record fine has been paid.”

The fine was agreed to last week, officially ending the state’s six-month investigation.

Blue Cross Blue Shield of North Carolina said it was “prepared to pay the amount” to settle the trouble.

“We have been actively addressing these issues, and expect to be stronger as a result of this process,” the insurer said by statement. “We remained committed to our customers and the communities of North Carolina, and are deeply sorry for the challenges that this created for our customers and providers.”

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