By Chad Terhune
AUGUST 23, 2018
(Illustration created using Getty
Images)
Ashley
Summers said she got an unpleasant surprise in February when she tried to pick
up a prescription for her rheumatoid arthritis: Her pharmacy said her insurance
had been canceled, even though her premiums were paid.
Summers
called Blue Shield of California and got her policy reinstated — then she said
it happened again in March and this time, the lapse in coverage dragged on for
three months.
Without
insurance to cover her medications and doctor visits, her arthritis and
fibromyalgia worsened to the point that she could barely walk, she said. In
June, she said, the state granted her permission to switch to another insurer.
“This
entire mess has been so incredibly stressful,” said Summers, 49, a personal
assistant in Los Angeles who had paid $593 a month in premiums. “For Blue
Shield just to pull the plug like this is infuriating.”
Around
the state, consumers with individual Blue Shield policies, like Summers, say
they have been subject to sudden, erroneous cancellations, especially in recent
months, forcing them to go without heart medicine, skip vaccinations for their
children and pay hundreds of dollars out-of-pocket for other medical care. On
social media, customers have described frantic attempts to get their coverage
reinstated.
@BlueShieldCA Blueshield keeps failing to
process my auto-pay and then canceling me. Sure feels like they don’t like insuring
me. Asked on Facebook and many people are having this problem. How about you?
We
apologize for the inconvenience. DM you member ID and a Specialist can look
into this for you. – AV https://twitter.com/messages/compose?recipient_id=904391540 …
@BlueShieldCA
If you ended my insurance on May1 why withdrew $779.14 on may1 then $392.91 on
May30 & $392.91 on June29. my next auto payment is on August1 I am not
letting this go You will pay back every penny this is illegal! #askfinney @MFinney #insurancefraud
pic.twitter.com/FUdnIgw6Dv
We
apologize for the trouble and would like to look into this. DM us your member
ID and contact info and a member of our team will reach out to address this
with you. – JN
Oh
yay, it’s been another 6 months or so of paying in full for insurance and again
@BlueShieldCA randomly
retroactively cancels our coverage cc @CoveredCA
this has been happening for nearly 5 years now.
We
apologize for the frustration. A Specialist will reach out shortly to assist
you. – JN
Blue
Shield has acknowledged failures in enrollment and billing for some customers
who purchased individual policies since 2014, both inside and outside the
Covered California exchange. The company declined to specify how many customers
were affected. The problems don’t appear to involve people with employer
coverage or enrolled in government health programs.
In
a June 22 lawsuit, the San
Francisco insurer blamed many of these problems on an outside contractor it had
hired in preparation for the launch of the Affordable Care Act in 2014. In
a countersuit, the
contractor, HealthPlan Services, denied the allegations and accused Blue Shield
of sharing inaccurate customer data.
In
a statement, Blue Shield
said: “The roll out of the Affordable Care Act was hard on the entire health
care system. Our vendor failed to provide the support it promised and we spent
millions of dollars to mitigate the impacts to our members.”
On
Friday, Summers sued Blue Shield in Los Angeles County
Superior Court, alleging breach of contract and seeking class-action status on
behalf of other customers. The insurer couldn’t be reached for comment about
the complaint.
Scott
Glovsky, a Pasadena, Calif., attorney representing Summers, said Blue Shield
has known about these problems for years. “Blue Shield is taking people’s
hard-earned dollars and then abandoning them when they’re sick,” he said.
Tina
Hoover, 47, a horse trainer in Sherman Oaks, Calif., said Blue Shield canceled
her policy twice in two months, even though she’d been paying her premiums
faithfully for years.
Blue
Shield denied more than $1,000 in doctor visits, saying she’d been terminated.
After four calls, inconsistent responses, non-responses and a pointed comment
by her husband on Twitter, she finally got her insurance back, she said.
“It was
frightening that Blue Shield could be so disorganized on something so important
like my health care,” said Hoover, who pays $858 a month in premiums and has
been a policyholder with the insurer for 15 years.
All
health insurers face complaints, from improper denials of care to annoying
customer service. But some experts say these persistent breakdowns in customer
service at Blue Shield represent a black eye for California’s third-largest
health insurer, which has 460,000 customers on the Covered California exchange
and 3.8 million enrollees overall.
“I’ve
never seen anything on this scale for such basic insurance operations,” said
Paula Wade, an industry analyst at Decision Resources Group in Nashville, Tenn.
“Honest to goodness, if you can’t take people’s money and credit their account
— that’s incredibly simple.”
This
is the SECOND time @BlueShieldCA
messed up my auto pay. And the 3rd time I've had to call them to fix it. How
dumb to you have to be to not take money people are trying to give you? Wish me
luck. It's my 2nd day with no heart meds. They tryin' to kill me?
We
apologize for the frustration. DM us your member ID and a member of our team
will look into this. – SS https://twitter.com/messages/compose?recipient_id=904391540 …
@BlueShieldCA I’ve been trying to add my
infant son to my policy since 5/21. I’ve paid his premiums and no one on your
staff can explain to me why he still has no coverage. His shots are now delayed
and noone on the phone seems to know what’s happening. Completely unacceptable.
We're
sorry for the inconvenience. DM us your member ID and a Specialist will look in
to this for you. – AV https://twitter.com/messages/compose?recipient_id=904391540 …
I
rarely tweet, but @BlueShieldCA
has the absolute worst customer service. They accidentally terminated my
insurance, and apologized for the error. After losing approx. 13 hours of work
time on the phone, still no solution. What the heck??
Across
its plans last year, Blue Shield had the highest complaint rate per
10,000 enrollees among the eight largest health insurers statewide, according
to the California Department of Managed Health Care. Blue Shield had 7.43
complaints per 10,000 enrollees, followed by Anthem Blue Cross (5.83),
UnitedHealthcare (4.72) and Kaiser Permanente (4.6). (Kaiser Health News, which
produces California Healthline, is not affiliated with Kaiser Permanente.)
For its
individual market plans, Blue Shield chose to outsource sign-ups, billing and
payment processing to HealthPlan Services, a major contractor for insurers
industrywide. In its breach-of-contract lawsuit against the contractor, Blue
Shield said it needed outside help to handle the dramatic overhaul of the
individual market in 2014 under the ACA.
By June
2014, Blue Shield said it had formed a team of people “whose sole job was to
address the failures in HPS’ services to ensure that Blue Shield’s customers’
interests were not impacted,” according to the lawsuit.
But the
glitches persisted, and Blue Shield said in its lawsuit that it has lost tens
of millions of dollars due to the contractor’s “egregious” failures on billing,
refunds and related matters.
HealthPlan
Services’ “data was ever-changing, inconsistent and flat-out incorrect,” Blue
Shield said in the 15-page complaint in San Francisco federal court.
In a
statement to California Healthline, HealthPlan Services called Blue Shield’s
claims “baseless” and said it has a “successful track record of providing
quality services to its clients and their members.”
But in
court papers, Blue Shield said the problems went beyond the sudden
cancellations.
For
instance, about 14,000 Blue Shield customers experienced “multiple attempted
charges on their bank accounts” over one weekend, according to the insurance company’s
lawsuit. About half the time, Blue Shield alleged, its contractor proposed
refunds or credits that were excessive or had no basis at all. One time, a
$27,000 refund went to the wrong customer, according to the lawsuit.
In
April 2017, Blue Shield said, it initiated termination of the vendor’s
contract.
In an
Aug. 13 counterclaim, HealthPlan
Services said “Blue Shield’s highly unusual data maintenance and transmission
methods and business processes resulted in customer-facing errors that were
directly attributable to Blue Shield’s conduct.”
In a
statement, Blue Shield countered that “HPS’ allegations are unfounded and we
look forward to responding to them in the legal proceedings.”
Meantime,
San Francisco resident Burcu Sivrikaya, 32, said she found out late last month
that Blue Shield had canceled her coverage — effective May 1. She spent hours
on the phone talking to seven different company representatives trying to get
her policy reinstated, only to be told it would take 30 days, she said. “Are
they using pen and paper? Why does it take 30 days? It’s insane.”
Now
Sivrikaya, a social media manager, is trying to get Blue Shield to refund the
$1,179 she said she paid in premiums for the three months the company withdrew
coverage.
The
Department of Managed Health Care fined Blue Shield and a subsidiary $557,500
last year for improper cancellations and
a variety of customer grievance violations.
Blue Shield is contesting some of those allegations and penalties, according to
the state.
Blue
Shield noted that it performed well on certain categories in the state data,
such as an extremely low complaint rate among medical providers.
The
company also said its customer satisfaction score improved in a recent consumer
survey by Forrester Research, increasing by nearly 2 percentage points to 63.6
out of 100. Forrester still labeled Blue Shield’s performance as “poor,”
putting it in ninth place out of 17 health insurers that were rated this year.
This story was produced by Kaiser Health News, which publishes California
Healthline, a service of the California Health Care Foundation.
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