Premera and LifeWise fined by insurance commissioner

  • Thu Feb 6th, 2020 1:03pm
  • News

Submitted by the Washington state Insurance Commissioner’s office

Washington state Insurance Commissioner Mike Kreidler fined Premera Blue Cross $100,000 and its sister company, LifeWise Health Plan of Washington, $50,000 for multiple violations in 2018 and 2019 related to how they handled pre-authorizations for treatment and policyholders’ appeals.

LifeWise is the only individual insurance company that covers San Juan County as of Jan. 1 of this year. Individual insurance is a policy purchased by the insured directly and not provided through the state or by an employer.

The issues were discovered after consumers filed complaints with Kreidler’s office.

One consumer filed a complaint after his planned December 2018 back surgery had to be rescheduled because Premera failed to authorize the procedure in a timely manner. The delay resulted in the surgery being rescheduled for January 2019, after his deductible renewed and he had to pay more out of pocket than he would have on the original surgery date.

Kreidler’s review found that:

• Premera delayed responding to more than 5,000 preauthorization requests, representing 3 percent of its 2018 total. The delays caused 43 policyholders, including the original complainant, financial harm exceeding $47,000, which Premera refunded in August 2019.

• LifeWise delayed responding to 447 preauthorization requests, representing 4 percent of its 2018 total. The delays caused seven policyholders financial harm exceeding $6,000, which it refunded in August 2019.

A second consumer filed a complaint that Premera failed to properly process her appeal of its decision to deny medically necessary treatment. The consumer has a rare disorder that requires lifelong, regular physical therapy to avoid further complications.

Premera started denying treatment in October 2018 when the consumer had used 20 of the 25 visits the plan allowed. The consumer continued to work through the appeals process, and Premera continued to deny or ignore the appeals. The consumer filed a complaint with Kreidler’s office in March 2019 and Premera finally granted an independent review appeal in May 2019, seven months after the initial request. State law requires insurers to forward appeals to independent review organizations within three days.

Kreidler’s review found that from January 2019 until September 2019, Premera and LifeWise sent more than 300 appeal forms to policyholders that contained inaccurate information about appeals timelines.

A third consumer filed a complaint after LifeWise denied a claim for out-of-state emergency treatment in August 2018. After the consumer appealed, LifeWise agreed to pay the claim for emergency services at the in-network rate but denied the appeal to pay surprise billing charges. LifeWise failed to inform the policyholder about the right to appeal the surprise bill. State law requires insurers to give consumers appeal information within five business days of a claim denial.

This legal action is not related to the customer service issues that Premera and LifeWise customers have been experiencing since late December. Kreidler’s office and the state Health Benefit Exchange estimate that about 2,000 Washington consumers are affected. Kreidler encourages consumers who are experiencing problems with accessing their Premera or LifeWise benefits to file a complaint with us. He is closely monitoring both plans’ response to the current issues.