Doctors and health care providers in the U.S. Virgin Islands have struggled for years with the costly, long-term logjam of Blue Cross Blue Shield of Puerto Rico, dealing with nonpayment, noncompliance and an obstacle strewn claims system, but soon they will face an even more difficult situation: A company spokesperson confirmed Tuesday that the insurer plans to pull out of the health insurance business in the U.S. Virgin Islands effective Aug. 1.
Blue Cross Blue Shield of Puerto Rico operates under the umbrella of a larger organization known as Triple S, the largest health insurance company in Puerto Rico. One of its subsidiaries manages the bankrupt Puerto Rican government’s health care system and insures 2.2 million people in Puerto Rico, half the beleaguered country’s population.
Blue Cross Blue Shield’s general process was bad enough, according to several health care provider administrators, with long delays between when service was rendered and when payment was finally made. But in October 2015, when the company was forced to upgrade its software, payments came to a complete halt.
To protect themselves, some physicians have had to take drastic measures, such as refusing to accept BCBS insurance and halting procedures such as colonoscopies for Blue Cross clients.
Dr. Mark Livingston issued a letter to all of his Blue Cross Blue Shield patients early this year stating that, effective March 1, his office would no longer accept BCBS insurance. That meant those patients who had BCBS would have to pay their bill in full and submit a claim for reimbursement directly to the insurance company or go elsewhere, Livingston said with obvious regret.
“I am a small office,” he said, adding that despite deep concern for his patients, he can no longer bankroll the insurance company while he waits for payment from them.
The letter said the action was being taken “due to the insurance company’s repeated failure to process and pay claims correctly and timely.”
Maggie Day, office administrator for Red Hook Family Practice, said the unpaid, unresolved bills in her office have been piling up for more than a year. In the last month or two, Day said, she has resubmitted every claim that had not been resolved since 2014.
By statute, health insurance companies in the territory have 30 days to either pay or deny a claim made to them. Each one of those payments or denials must be accompanied by universally understood codes that define and clarify the reasons for the payment or nonpayment.
Day said the claim denials were coming back with no coding at all. It would be within the rights of the health care provider under such circumstances to require the patients to pay the unreimbursed amounts, but Day said Red Hook Family Practice didn’t do that. They footed the unpaid bills and sucked it up while expending enormous resources unraveling the claims processing nightmare, which they are still doing.
She said approximately 40 percent of Red Hook’s clients have Blue Cross Blue Shield coverage. That’s a lot of money for a provider to cover for as long as a year or more.
On the up side, BCBS has suddenly begun to comply with the 30-day regulation on new claims, Day said.
“We are now getting payment in the required 30-day period to pay or deny the claims,” she said.
Day also said she had teamed up with representatives from BCBS to “resolve back issues.”
If there is a hero in this tale of a costly technical and cash flow ordeal, it appears to be V.I. Equicare, the entity begun in 1997 to set up a preferred provider network in the territory and to negotiate all insurance company contracts. It is the messenger between the health insurance companies and the providers.
“Somebody needs to thank V.I. Equicare,” said Helen Goldman, office manager for her husband Dr. Lawrence Goldman’s gastroenterology practice on St Thomas.
For years, she said, nothing got paid at all. “They (BCBS) never lived up to the contract” as negotiated with V.I. Equicare. As of Tuesday, all her backlog of claims have been paid. But that has not come without a price.
Along with directly and dramatically affecting cash flow, staff in these offices has been diverted from their standard duties to focus on collections and unraveling the indecipherable or complete lack of claims coding spitting out of BCBS’s software.
Day said she has had to devote two staff members working a couple of afternoons a week to comb through the old unresolved claims, bring them up to date and resubmit them for payment.
Goldman was on the phone with Blue Cross daily for months to get caught up. She also let the insurance company know her office would no longer conduct colonoscopies on Blue Cross Blue Shield policyholders.
V.I. Equicare Director Dynel Soto was aware the insurance company had been functioning for a long time with an antiquated system that made claims processes unintelligible for physicians. She said provider complaints had become so overwhelming that V.I. Equicare called for a meeting with Blue Cross Blue Shield in December to resolve the issues by developing an action plan with BCBS.
Soto estimated she spends 30 percent of her time following up on the plan with the Blue Cross Blue Shield to be sure it is moving forward.
In a statement sent Tuesday night after the Source inquired about the state of claims in the V.I., Carlos D. Torres, senior vice president of BCBS of the US Virgin Islands, confirmed the December meeting, saying, “BCBS-USVI has processed many claims that were previously denied or paid incorrectly and continues to process others.”
The statement, which was issued before the Source further inquired about a report that BCBS planned to pull out of the V.I., went on to say, “BCBS-USVI will correct any problem with claims and reaffirms its commitment to honor all agreements with providers and plan members in the Virgin Islands.”
The V.I. Code allows for a fine of 100 percent of disputed amount up to $5,000 for each violation of the code that requires payment to be made within 30 days of claim submittal.
With hundreds of thousands of dollars in unpaid arrears claims, this could spell disaster for Blue Cross Blue Shield if the regulating agency, the Lieutenant Governor’s Office, began fining the huge health insurance company.
Insurance Commissioner Gwen Brady and Lt. Gov. Osbert Potter were traveling Tuesday to a conference in Washington, D.C., but the Source submitted four questions to Brady:
– When was the Division of Banking and Insurance first notified that BCBS was not paying their claims on time and was also not including decipherable reasons for nonpayment on those claims the company denied? Who first notified Banking and Insurance?
– Has the division of insurance fined Blue Cross Blue Shield for any claim not in compliance with the statute?
– If so, how much does that total? Has BCBS paid the fines? And who does the money go to?
– If they have not been fined, why not?
As of publication, Brady had not responded.
Meanwhile, a spokesperson for Blue Cross responded almost immediately to the question about the company pulling out.
“As part of our strategic decision to focus on the core and reevaluate unprofitable businesses, we’ve decided to discontinue offering group health insurance products in the US Virgin Islands effective August 1, 2016," the informal statement from Lisette Nunez said.
The information, she said, came from last week’s earnings call.
The statement continued, “We are currently working with the government of the USVI to ensure a smooth transition out of this market segment. We will continue serving policyholders of the Blue Cross Blue Shield Association’s federal employees program who reside in the Virgin Islands and certain insurance contracts we underwrite and issue to Puerto Rico-based employers that have branch office employees there.”
It is anyone’s guess how this will affect the disputed and as yet unpaid claims hanging over the head of the Virgin Islands’ health care community and what the Blue Cross pull out at this time could mean to the already flailing industry.