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Originally published Wednesday, September 7, 2011 at 4:46 PM

State insurance commissioner raps Regence — again

Regence BlueShield, the state's largest health insurer, is on the hot seat again with state Insurance Commissioner Mike Kreidler, who has ordered it to correct what he says is "an ongoing pattern of errors and problems" affecting tens of thousands of consumers

Seattle Times health reporter

quotes How about coming down harder on Regence than just sending mean letters and calling the... Read more
quotes Our company is considering dropping them as our provider. Read more
quotes Ever notice that whenever a corporation has "operational difficulties" they s... Read more

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Regence BlueShield, the state's largest health insurer, is on the hot seat again with state Insurance Commissioner Mike Kreidler, who has ordered it to correct what he says is "an ongoing pattern of errors and problems" affecting tens of thousands of consumers.

Kreidler says the problems, which affected Regence's subsidiaries as well, include:

• Medical claims of 90,000 retirees that have gone unpaid for months, totaling as many as 300,000 individual claims.

• Computer problems that resulted in the company withdrawing money — sometimes totaling thousands of dollars — from more than 200 bank accounts of people who are not Regence members. At times, the names and ID numbers of some Regence members were accidentally disclosed to strangers.

• That same "SurePay" computer-system malfunction spat out more than 6,000 incorrect transactions.

• A pattern of claims being delayed because Regence temporarily misplaced documentation.

• A customer-service number that told customers help was only available on Thursdays, and on Thursdays there was no answer.

• After-the-fact denial of claims for many pre-authorized medical services — sometimes within 72 hours of a scheduled surgery and without a reasonable basis.

In a statement Wednesday, Regence conceded that it is currently experiencing some "operational difficulties which have unfortunately impacted our ability to provide the level of service our members, customers and providers have come to expect of us."

Regence said the service problems were due, in large part, to a "one-time system change at the beginning of the year," as well as benefit changes under health-care reform.

"We deeply regret the inconvenience this has caused, and we are devoting all the necessary resources to correcting the problems," working closely with those affected as well as with state regulators, the company said.

On Sept. 1, insurance regulators from Washington, Oregon, Idaho and Utah summoned the Regence Group's CEO Mark Ganz to a meeting in Salem, Ore.

According to a briefing paper Kreidler prepared for the meeting, the company "routinely provides incomplete and inadequate responses" to insurance-commissioner complaint letters.

"The status quo clearly isn't acceptable," Kreidler said in a news release. "Many of these things seem to be systemic problems, rather than isolated incidents."

Previously, Kreidler has fined Regence for wrongly denying contraceptive claims and for failing to provide mandated coverage for prostate-cancer screenings.

Last year, it also ordered the company to stop turning down insurance applications for children.

Carol M. Ostrom: 206-464-2249 or costrom@seattletimes.com

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