HARRISBURG, Pa. (WHTM) — Acting Insurance Commissioner Michael Humpherys announced on Wednesday, Jan. 4 the results from a comprehensive Affordable Care Act market conduct examination that the Pennsylvania Insurance Department (PID) conducted on the practices and procedures of Capital Blue Cross. The department imposed the lowest penalty reported of any insurer undergoing such an examination.

“Market conduct examinations are a way for the department to ensure that consumers are being afforded the rights and protections guaranteed to them by Pennsylvania law,” Humphreys said. “Our top priority will always be protecting consumers, and we aim to hold businesses to the high standards that their customers deserve. The results of this exam will see consumers receiving restitution for claims that were incorrectly processed, as well as applicable interest.”

“Capital Blue Cross has been cooperative in its response to the exam, and we expect we will see continued improvement when re-examinations occur,” Humphreys added.

PID has said it’s the lowest penalty reported to date of any insurer undergoing such examinations.

Capital Blue Cross released the following statement to abc27 regarding the PID market conduct exam:

Capital Blue Cross is pleased that the Pennsylvania Insurance Department’s recent comprehensive Affordable Care Act market conduct examination identified no violations in most areas reviewed and imposed the lowest penalty reported to date of any insurer undergoing such an examination.

Capital continually evaluates its operations and procedures to ensure it is meeting the needs of our members, and we appreciate the department’s thorough and thoughtful review of our efforts. Capital already has taken action to address the issues noted in this exam, which covered a 15-month period in 2017 and 2018.

It is important to our leaders and employees – and vital to our mission – that Capital act with integrity and in compliance with all regulatory requirements, while continually improving our members’ access to high-quality, affordable healthcare.

Capital Blue Cross

The Pennsylvania Insurance Department is in charge of upholding fair business practice standards for consumers, companies, and insurance professionals.

The Capital Blue Cross-examination, which covers the period from Jan. 1, 2017, to March 31, 2018, identified concerns with the following:

  • Claims processing, including claims being denied for lack of prior authorization when prior authorization had already been obtained,
  • A coordination of benefits issue has since been updated.
  • Additional Unfair Insurance Practices Act violations relating to unclear communications with members.

The department has ordered Capital Blue Cross to take corrective actions to address the violations. They are also ordered to pay an $85,000 penalty.

To date, about 60,000 Pennsylvanian consumers have reserved $5.87 million in restitution as a result of the department’s ACA market conduct examinations of other major health insurers. A full copy of the Capital Blue Cross exam can be found here.

The Insurance Department will continue to monitor and verify that Capital Blue Cross’s corrective actions have taken place, including through quarterly reporting, as well as through a reexamination process in the future.