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Lindeen Issues Historic Fine

Former Blue Cross Blue Shield fined $250,000

March 13, 2014

HELENA – Montana Insurance Commissioner Monica J. Lindeen announced today a historic fine against Blue Cross Blue Shield of Montana – now known as Caring for Montanans, Inc. – as a result of an examination into the company’s operations.

Lindeen fined the company $250,000, the largest of its kind for a market conduct exam in Montana history. The state received the money last week.

“Protecting consumers has always been my number one priority,” Lindeen said. “This company failed to follow the rules and consumers were hurt as a result. I won’t allow that under my watch.”

The fine was the culmination of a multi-year examination into many parts of the company’s inner workings called a “market conduct exam.” Such exams are required by Montana law and regularly conducted by Lindeen’s office on all insurance companies with offices in Montana. In this case, the exam looked at how Blue Cross operated between 2006 and 2010. It was conducted both by accredited insurance examiners at Lindeen’s office and outside accredited examiners.

All insurance exams measure a company’s performance against a long list of standards – most spelled out either in Montana insurance statutes or administrative rules. They range from how the company pays commissions to its agents to how it handles customer complaints or appeals of denied claims.

The entire 39-page report can be found here on the Insurance Commissioner’s website.

The exam concluded that, among other things, the company was applying out-of-network costs for emergency room care, in violation of state law. In another case, the company was collecting money for things other than health insurance and not disclosing it to the employers who paid the premium, also in violation of state law. Additionally, the company in many cases failed to retain required records that would have allowed examiners to determine if the company was following state law.