For the first time, the Illinois Department of Insurance announced fines totaling $339,000 for Health Care Service Corporation, the parent company of Blue Cross Blue Shield of Illinois for violating the material change notice requirement in the state’s Network Adequacy and Transparency Act.
Network adequacy filings are used to help ensure consumers have access to a network of providers that meets proper time and distance standards, so patients have access to care they need.
The Department found the company did not properly file updated network adequacy filings following the termination of its contract with Springfield Clinic. Springfield Clinic serves approximately 100,000 consumers in Central Illinois.
IDOI reported that after months of delay, the Department finally received BCBS’s final filing for its network adequacy review on Thursday. The filings were 244 days late and 95 days late, resulting a total fine of $339,000. Late fees are $1,000 per day.
“Insurance companies must be able to show that they have adequate provider networks, so that Illinois consumers have access to the medical care and providers that they pay for,” said Governor JB Pritzker. “This fine should serve as notice that we will require insurers to maintain adequate provider networks and uphold all consumer protections under the law.”
According to our newspartners at WAND-TV although the department reviews every plan’s network for adequacy when the plan is filed, the law recognizes that a plan’s network may change mid-plan year. In anticipation of potential changes, there is a provision that if there is a “material change” in the network, the company must submit updated network adequacy filings to show the change has not rendered the network inadequate.
Under state law, insurers are required to report to the Director any material change to an approved network plan within 15 days after the change occurs. “This is the first time the Department has issued a fine for the material change filing requirement in the Network Adequacy Transparency Act,” said IDOI Director Dana Popish Severinghaus. “We’re disappointed that the company continues to evade acknowledging this material change. Under Illinois law, the removal of a major health system, like Springfield Clinic, is a material change that could render a network, or parts of a network, inadequate. We are committed to exercising the Department’s full authority to protect consumers from being harmed in a corporate contract dispute.”
Blue Cross Blue Shield must pay the fine immediately. They have ten days to contest the fine.