Blue Cross Blue Shield Fined $339,000

For the first time ever, the Illinois Department of Insurance (IDOI) announced Monday fines totaling $339,000 for Health Care Service Corporation (HCSC), 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 an important tool to help ensure that consumers have access to a network of providers that meets proper time and distance standards. This is critical to ensuring that patients have access to care that they need.

The Department found that the company did not properly file updated network adequacy filings following the termination of its contract with Springfield Clinic which serves approximately 100,000 consumers in Central Illinois. After months of delay, the Department finally received BCBS’s final filing for its network adequacy review on Thursday. The Department determined that the filings were 244 days late and 95 days late, accumulating 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.”

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 these 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 demonstrate that 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.