Illinois Blues pays $25M fine for denying sick kids

Blue Cross Blue Shield of Illinois will pay $25 million to settle allegations that it denied coverage to sick children in need of nursing care by "fraudulently" shifting their claims to the state's Medicaid program, reports Chicago Breaking Business.

The settlement, reached by Illinois Attorney General Lisa Madigan and U.S. Attorney Patrick Fitzgerald, follows years of complaints from patients and their families. The cost of the medical care, which included private-duty nurses for sick children and other ill patients, should have been covered by Illinois Blue Cross, but instead was shifted to Medicaid at a cost of nearly $12 million. The claims were denied based on "internal, undisclosed guidelines that were more restrictive than the language provided to patients in plan policy materials," Madigan's office said.

Under the agreement, Blue Cross will pay $14.25 million to Illinois and $9.5 million to the U.S. government. The company will also pay $1.25 million to consumers who were denied coverage and could not receive Medicaid.

Blue Cross did not admit liability, but said it agreed to the settlement to avoid the delay, uncertainty and expense of protracted litigation, according to the Chicago Sun-Times. "This dispute began many years ago when we reviewed certain claims and determined that the benefits sought were not covered by the applicable insurance plans and policies," Illinois Blue Cross spokesman Jack Segal told Breaking Business. "These plans and polices determine which benefits are covered and which are not. Several years ago, in cooperation with the state attorney general, we expanded our explanation of benefits to ensure that our members understood what nursing benefits are covered under their plans."

To learn more:
- check out the Chicago Breaking Business article
- read the Chicago Sun-Times story
- see the Illinois attorney general's statement

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