Virginia SCC orders two big health insurers to reimburse hundreds

RICHMOND — Two of the state's biggest health insurers must reimburse more than 900 Virginians for overcharges, the State Corporation Commission ordered.

It ordered Cigna Healthcare to pay 457 customers a total of nearly $404,000 after the insurer told them it reduced the amounts it paid on claims based on patients' eligibility for Medicare.

Such reductions are prohibited, and telling customers incorrect information about that is a violation of state law, the commission said.

In addition, Cigna paid $137,000 to settle the commission's Bureau of Insurance investigation into whether its communications with customers about Medicare eligibility were misleading.

"This offer is being made solely for the purpose of a settlement and does not constitute, nor should it be construed as, an admission of any violation of law," Katie Stewart, Cigna's regional vice president, said in a letter to Julie Blauvelt, the insurance bureau's deputy commissioner.

Cigna also agreed to update its standard operating procedures for all staff who assist with its individual and family plan policies.

Separately, the commission ordered Anthem and its HealthKeepers-managed care plans to reimburse 446 Virginians nearly $217,000. The error involved 1,287 claims.

The issue was that Anthem and HealthKeepers imposed cost-sharing requirements for certain preventive services, when this was not allowed, the commission said.

Anthem erroneously charged a copay to members for a brand name contraceptive with no generic alternative, when the prescribing doctor determined that the contraceptive was medically necessary for the patient, a Bureau of Insurance investigation of a customer's complaint found.

The Code of Virginia says health insurers have to cover preventive services, including contraception, and that they cannot charge any co-payments or require out of pocket spending to satisfy coinsurance or deductible requirements.

Anthem said that the error was due to an incorrect system configuration, and it affected claims made between 2021 and 2024.

Anthem paid the state an additional $20,000 to settle the matter.

In reimbursing customers and paying the $20,000 to the state, the company was not admitting any wrongdoing, said Monica Schmude, president of Anthem Health Plans of Virginia and HealthKeepers.

Last month, a Bureau of Insurance market conduct examination of Cigna's claims handling found the insurer treated claims for coverage of autism and transgender care unfairly.

The bureau also found Cigna was improperly lenient with claims for outpatient physical therapy, occupational therapy and chiropractic medical or surgical benefits.

In addition, the bureau said Cigna used unfair methods to determine what care is subject to prior authorization, concurrent review and retrospective review, as well as for how it classifies outpatient services.

In response, Cigna agreed to a 13-point corrective action plan and paid $330,000 to settle the bureau's belief that it violated state law and regulation.

Last year, Anthem and HealthKeepers paid $362,000 to settle hundreds of alleged violations of state insurance law that insurance bureau market conduct examinations found, including assertions that in certain instances, it improperly denied claims and did not pay the right amount.

Some were the same kind of issues the State Corporation Commission Bureau of Insurance found after an examination six years ago and that Anthem said it would fix, the bureau's latest examinations of two of the firm's main operations found. Anthem paid $294,000 in 2020 to settle those earlier allegations.