North Dakota Nonprofit Health Insurer Fined for Systemic Violations

Print Share on LinkedIn More

December 5, 2014; Jamestown Sun

The North Dakota insurance commissioner, Adam Hamm, announced that Blue Cross Blue Shield of North Dakota (BCBS-ND) has been fined the maximum $60,000 for a pattern of violations, including “handling of claims, including health insurance coverage, mental health and substance abuse treatment, and an affiliated life insurance company’s failure to pay advertised premium discounts,” according to the Jamestown Sun. Hamm noted that the fines would have been much higher had the insurer been a for-profit company rather than a member-supported nonprofit.

Insurance commissioner Hamm was quick to point out that BCBS-ND is not a bad insurance company and that his office will oversee corrective action.

During the period investigated, from 2010 to 2013, BCBS-ND was led by CEO Paul von Ebers. As NPQ reported, von Ebers was fired earlier this year after BCBS-ND reported over $80 million in losses during 2013, including $50 million lost by a for-profit subsidiary of BCBS-ND that failed to deliver on a contract to establish an online state insurance exchange for the state of Maryland.

The $60,000 penalty will be paid from the insurance company’s surpluses, so policyholders and health care providers should not be affected by the settlement. The company’s website reports that its 2013 income was approximately $1.2 billion and that it paid claims of $1.1 billion that year. BCBS-ND serves 510,000 policyholders, more than half the population of North Dakota.—Michael Wyland