Insurance company under fire by state

The state has officially stepped in to a situation involving the insurance company Blue Cross Blue Shield of Illinois and Springfield Clinic. On Monday, the state's Department of Insurance announced a $339,000 fine for the company.

The DOI alleges that the Blue Cross Blue Shield failed to appropriately report a "material change" to the insurance company's network of medical service providers.

After the insurer failed to reach a new contract with Springfield Clinic, the company stopped covering services there in July 2021 for members with Health Management Organization plans and on Nov. 17, 2021 for members with Preferred Provider Organization plans, according to the DOI.

Blue Cross Blue Shield of Illinois is the largest insurance company in Illinois, with 8.1 million members, according to its website. Harmony Harrington, Blue Cross Blue Shield's vice president of government and community relations, said about 55,000 customers were affected by the removal of Springfield Clinic from their network.

"Under Illinois law, the removal of a major health system, like Springfield Clinic, is a material change that could render a network, or parts of a network, inadequate," said DOI Director Dana Popish Severinghaus.

Blue Cross Blue Shield filed notifications of these changes in March, leading the state agency to fine Health Care Service Corporation, the parent company of Blue Cross Blue Shield $1,000 per day.

Blue Cross Blue Shield claims that the reason for dropping Springfield Clinic from its coverage network is due to a negotiations breakdown. Talks between the insurer and clinic began in May 2021 ahead of the end of their previous contract. They say Springfield Clinic wanted a 75% increase to their reimbursement rates — essentially what the insurance company pays to doctors and hospitals.

"Springfield Clinic is already the highest paid provider in the region and are already paid higher than most providers in Chicago," said Harrington.

This is the first time the state has issued fines under the Network Adequacy and Transparency Act, a state law passed in 2017 which requires that these kinds of changes be reported to the state.

"This fine should serve as notice that we will require insurers to maintain adequate provider networks and uphold all consumer protections under the law," said Gov. JB Pritzker.

Blue Cross Blue Shield has until March 28 to pay the fine, though it can contest the decision to the department.

When asked how Blue Cross Blue Shield will respond to the fine, Harrington said that the organization is "evaluating next steps."

In addition to the fine, lawmakers in the state's Capitol held a hearing to further investigate the matter on Tuesday, in which lawmakers discussed the matter with representatives from Blue Cross Blue Shield, the Illinois State Medical Society and Springfield Clinic.

"We're always open to having discussions about ways we can better serve our members," said Harrington.

Springfield Clinic has a webpage for patients with questions about this situation.

Contact Andrew Adams: aadams1@gannett.com; (312)-291-1417; twitter.com/drewjayadams.