Insurance regulators from four northwestern states met with management from the region's largest health insurer this month to address the company's troubling operational problems, which have sparked numerous complaints from consumers.
"The Regence Group needs to get its act together," Washington State Insurance Commissioner Mike Kreidler said in a press statement. "We've seen an ongoing pattern of errors and problems with Regence and its subsidiaries. Many of these problems directly harm consumers and health care providers."
Among the problems outlined by Kreider's office were:
• The insurer's "SurePay" computer system malfunctioned on Aug. 5, 2011, causing more than 6,000 incorrect transactions.
• Tens of thousands of retirees have gone months without payment for their medical insurance claims.
• Regence apparently withdrew money from the bank accounts of people who are not even members and in the process accidentally disclosed members' names and identification numbers to strangers. Kreidler's office did not provide information on how such an error could occur, but said the withdrawals in some cases totaled thousands of dollars.
• Some claims have been denied after the fact for pre-authorized medical services.
• "There is a pattern of claims being delayed because documentation has been misplaced by Regence, only to later be found," according to Kreidler's office.
• When customers called a number provided by the health insurer for consumer questions, they received a message saying representatives were available only on Thursdays. Then when they called on Thursdays, no one answered the phone.
State insurance regulators from Washington, Oregon, Idaho and Utah called Regence Group CEO Mark Ganz to a meeting in Salem, Ore., Sept. 1 to discuss the problems.
The Portland-based company said in a media statement that it's devoting "all the necessary resources" to correct the problems.
"Our service level challenges are due in large part to a one-time system change at the beginning of the year, as well as a number of recent benefit changes under health care reform," the company stated. "While these issues are temporary, we deeply regret that we have fallen short on our service commitments to a small portion of our more than 1 million members, as it is our goal is to fully serve all of our members all of the time."
The Regence Group is the largest health insurer in the Northwest, serving as Regence BlueShield of Idaho, Regence BlueCross BlueShield of Oregon, Regence BlueCross BlueShield of Utah and Regence BlueShield in Washington.
This isn't the company's first run-in with regulators. Kreider ordered Regence BlueShield, Asuris Northwest Health and Regence BlueCross BlueShield of Oregon in September 2010 to stop wrongly turning down health insurance applications for children. Those same health plans were also fined $125,000 last year for violations, including failing to pay mandated coverage for prostate cancer screenings.