Blue Cross Blue Shield: Vermont Health Connect owes $6.2 million

MONTPELIER — Blue Cross Blue Shield of Vermont is seeking $6.2 million from the state for premiums the insurer did not receive and claims it paid out after the state had terminated individual insurance plans, according to the company and state officials.

BCBS and the state are engaged in a reconciliation process to settle the books for health insurance plans sold on Vermont Health Connect, the state’s online health insurance exchange, during 2015. It is the second year that reconciliation is taking place. The state paid $1.6 million to settle the book of business in 2014.bc

A public records request made by the Vermont Press Bureau seeking documents related to the 2015 reconciliation process was returned by the Department of Vermont Health Access, but all 125 pages had all relevant information related to the request redacted.

Lawrence Miller, Gov. Peter Shumlin’s chief of health care reform, and Cory Gustafson, director of government and public relations at BCBS, confirmed that the insurer sent the state a letter about a month ago requesting the $6.2 million payment.

“That’s between identification of potential missing premiums and potential identification of premiums paid for people who were terminated retroactively,” Miller said.

The Shumlin administration is expected to discuss the reconciliation process with the Legislature’s Joint Fiscal Committee on Thursday.

The requested payment is comparable to the amount BCBS asked the state to pay last year. BCBS told state officials last year that about $3.8 million was owed for unpaid premiums in 2015. Another $2.3 million was requested for claims it paid out for health plans that were terminated by the state but not communicated to the company. The two sides eventually agreed on the $1.6 million figure.

Similar to last year, Miller said the actual amount the state owes BCBS could be lower than $6.2 million.

“I don’t know whether as much will get trimmed as last year, or less,” Miller said. “Given where we are in the process compared to last year, we would expect that number to come down but I’m not going to prejudge whether or not it does.”

Lawrence Miller

Lawrence Miller

Miller said DVHA is reviewed individual accounts to determine if claims should have been made to other insurance providers.

“DVHA might have information that they were on MVP, Medicaid or moved on to Medicare,” he said.

But Gustafson said BCBS believes its number is accurate. The findings have been sent to KPMG for an independent audit.

“There isn’t an expectation that there will be whittling down of this number on our side,” he said. “We’re pretty confident in this calculation.”

If the amount requested by BCBS holds up, the state will look to cover the costs from existing funds before asking lawmakers for more money.

“Similar to last year, this is the sort of thing that would be addressed first by looking in the Vermont Health Connect budget, then the DVHA budget and then the (Agency of Human Services) budget. And then only then in the budget adjustment,” he said, referencing the annual mid-year spending bill that adjusts state spending.

Miller said the state began performing monthly reconciliation a few months ago, which should make streamline the process of closing out the 2016 plan year.

“We anticipate that this will be the last year that there is a large-scale annual reconciliation. We do expect this reconciliation to happen for the 2016 plan year, though. I do expect it to be — rough order of magnitude — probably half of this year,” he said.

Gustafson said retroactive terminations have continued in 2016, though.

“It’s impossible to say whether it will be higher or lower. Obviously, our hope is that the system functions better and better into the future,” he said. “We have had some issues in the 2016 plan year. It’s impossible to say whether it will be better or not when we reconcile next year. Reconciliation is a normal part of business.”

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