A settlement has been reached to resolve False Claims Act Allegations against BlueCross BlueShield of Illinois who is accused of wrongly terminating insurance coverage and denying patient claims, among other claims.
Under the agreement, BlueCross BlueShield of Illinois will pay $14.25 million to the state of Illinois and $9.5 million to the United States. The company will also pay $1.25 million to Illinois for allegations under the state consumer fraud statute.
In detail, the United States contends that BlueCross BlueShield of Illinois wrongly terminated insurance coverage for private duty skilled nursing care for medically fragile, technologically dependent children, in order to shift the costs of such care to the Medicaid program. Medicaid funds a special program designed to provide home care for children at risk of institutionalization.
As a result, children whose specialized care should have been covered by BlueCross BlueShield of Illinois under the terms of existing insurance policies, were shifted to the government-funded Home and Community Based Services Medicaid program, operated by the Illinois Division of Specialized Care for Children under an agreement with the Illinois Department of Healthcare and Family Services. As a result, Medicaid spent millions of dollars providing care that should have been paid for by private insurance.
The settlement resolves claims that BlueCross BlueShield of Illinois denied patient claims based on internal, undisclosed guidelines that were more restrictive than the language provided to beneficiaries in plan policy materials. Additionally, the government alleged that BlueCross BlueShield of Illinois improperly told policy holders that children were not covered for private duty nursing during the claims review process sought after initial denials.
