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.