MONTPELIER — Blue Cross Blue Shield of Vermont believes it is owed more than $5 million from Vermont Health Connect for unpaid insurance premiums and claims paid on plans that were terminated by the state in 2015.
The insurance carrier is going through a reconciliation process with the state for the second straight year to settle its books for plans it sold through the state’s online health insurance marketplace. For plans sold in 2014, the state paid BCBS $1.6 million after the reconciliation process was complete.
BCBS told state officials last month that it believes as much as $3.8 million is owed for unpaid premiums in 2015. Additionally, another $2.3 million is owed on claims it paid out for plans that were terminated by the state but not communicated to the company, according to Cory Gustafson, director of government and public relations at BCBS.
“It’s in the process,” he said. “We definitely want it done as soon as possible, but it’s a little like everything to do with Vermont Health Connect, it’s out of our hands.”
Lawrence Miller, chief of health care reform for Gov. Peter Shumlin, said the numbers submitted to the state by BCBS is a “perfectly fine starting point.”
“Last year I think the starting point was a bigger discrepancy … so I do think it will be a fairly straight forward process,” he said.
Miller said VHC customers have until the federal tax deadline of April 15 to square up their premium payments, so the state cannot complete reconciliation until after that date. The state will then work with BCBS and a third-party auditor to determine the amount the insurance carrier is owed.
Miller said last year that the state was hoping the amount to be reconciled for 2015 plans would be significantly smaller.
“It’s a smaller problem but not what we had hoped we’d be looking at,” Miller said. “I would have preferred to see it be about 10 percent of the scale of last year, but obviously there’s still a bit of work to do to get to a point where that’s true.”
Gustafson said BCBS was also anticipating a smoother billing and payment process in 2015.
“We were obviously hoping for a less disruptive 2015, but I don’t know that that happened,” he said.
The state’s payment processor had $5.9 million in a custodial account at the end of 2015, according to Miller. The account includes funds that have not been applied to accounts for various reasons. Some of that money could end up being paid to BCBS through the reconciliation process, Miller said.
Some of the $2.3 million in claims paid out on terminated plans by BCBS could also be legitimized through the reconciliation process, Miller said.
The reconciliation process is expected to be completed this summer.