Blues plan fined $250K for unfair rating practices

Blue Cross Blue Shield of Rhode Island has been fined $250,000 for using unfair and illegal rating practices for two years, according to an order from the state insurance commissioner.

From 2007 to 2009, Blue Cross greatly varied how it paid insurance claims by not fully funding administrative costs in the large group market and discounting rates without actuarially sound underwriting standards, WPRI reported.

As a result of Blue Cross's actions, some members arbitrarily received lower rates while other members randomly got higher rates, reported GoLocalProv.

"In Rhode Island, the law requires insurers to submit their rating practices to the Office of the Health Insurance Commissioner for review and approval, and then to follow these rating practices at all times," Commissioner Christopher Koller said Friday in a statement. "The effect of these attempts to retain market share and membership was to create an unstable market for health insurance during the period in question. An unstable market is an unpredictable and unfair one: the rules of the road must be followed."

Koller admitted that Blue Cross cooperated fully with his office and quickly revised many policies and procedures.

To learn more:
- read the insurance commissioner statement and order (.pdfs)
- read the WPRI article
- see the GoLocalProv article

Suggested Articles

Rebates for Part D drugs grew from 2011 to 2015 but not enough to offset price spikes, a study found.

Medicare Advantage plans still have time to meet their year-end goals.

A recent digital health conference highlighted the ongoing obstacles to using next-generation technology to impact health outcomes.