Three R.I. health insurers pay over $1 million in fines for lapses in COVID coverage
Three Rhode Island health insurers were fined for charging patients out-of-pocket costs for pandemic-related care, such as emergency room care, doctor visits, and hospital stays, that should have been fully covered, the Office of the Health Insurance Commissioner said. (Getty image)
UnitedHealthcare paid $1 million and two Rhode Island health insurers paid lesser fines for violating state rules for health coverage of COVID-19 services.
Health Insurance Commissioner Cory King announced Thursday that his office had finished collecting fines charged to UnitedHealthcare, Blue Cross & Blue Shield of Rhode Island (BCBSRI) and Aetna. The insurers were penalized for charging patients out-of-pocket costs for pandemic-related care, such as emergency room care, doctor visits, and hospital stays — services that should have been fully covered under a 2021 rule promulgated by Patrick Tigue, King's predecessor in the the Office of the Health Insurance Commissioner (OHIC).
UnitedHealthcare incurred the heaviest fine while Blue Cross and Aetna were fined $20,000 and $10,000, respectively. Consent decrees for the insurance companies stipulated payment was due for UnitedHealthcare and Aetna on June 2, while Blue Cross needed to pay up by June 6. King said Thursday that the final payment was made last week.
'OHIC expects health insurance companies to comply with the law,' King wrote in an email. 'When they do not, they must take corrective actions and face consequences.'
The fines accumulated from July 3, 2021, when the rule was formalized into general law, through May 11, 2023, when Rhode Island's cost waiver rule expired and the COVID-19 public health emergency officially ended.
The cost waiver, however, only applied to fully insured plans, or coverage plans purchased by employers in which the insurer assumes the financial responsibility and risk. The cost mandate did not apply to people receiving services under self-insured plans — the kind of coverage often purchased by larger companies and held by about 60% of covered Rhode Islanders.
The three consent decrees OHIC released Thursday detail the scope of violations and how the insurers fixed their billing problems. UnitedHealthcare's hefty $1 million fine derived from 1,545 claims in which Rhode Island plan members were wrongly charged for COVID-related care. In 2023, the company reprocessed the claims and refunded roughly $270,000 to affected members.
'We are pleased to have resolved this issue with the Rhode Island Office of the Health Insurance Commissioner,' Bradley J. Alexander, a spokesperson for United, said in an email Thursday. 'We remain focused on helping individuals access care while supporting our employees, our network of care providers, our clients and the communities we serve.'
The Blue Cross case was less straightforward. The insurer had already waived cost-sharing for COVID treatment in April 2020, according to spokesperson Rich Salit.
'BCBSRI's cost-share waiver applied to all in-network services and out-of-network services received outside of Rhode Island,' Salit wrote. 'For services in Rhode Island, BCBSRI was encouraging members to seek care from our broad network, as members going out-of-network could still be exposed to provider balance billing.'
Balance billing is when out-of-network providers charge patients for what insurance didn't pay.
According to the consent decree, Blue Cross believed its policy complied with the OHIC statute, at first indicating 'that it was not waiving cost sharing on services related to the treatment of COVID-19 if such services were provided by out-of-network providers within Rhode Island.'
Nevertheless, OHIC did not agree with that interpretation, penalized the company for not covering the out-of-network care in 19 claims. Blue Cross was required to pay $1,751.60 in refunds, plus the $20,000 fine. Salit said the claims came from eight plan members.
'BCBSRI agreed to reimburse the cost sharing those members incurred and updated its policy, and the matter was resolved,' Salit wrote.
Aetna, a subsidiary of CVS, only had three claims flagged under the OHIC rule.
'We are pleased this agreement resolves issues with the OHIC related to three (3) Aetna claims, which we reprocessed in 2022,' Phillip J. Blando, an Aetna spokesperson, wrote via email.
The penalty money goes into the state's general fund, according to OHIC.
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