DMHC Fines Blue Cross of California $150,000 for Computer Billing Error
The Department of Managed Health Care on Tuesday announced a $150,000 fine against Blue Cross of California for overcharging nearly 45,000 individual policyholders a total of $12 million in early April, the San Francisco Chronicle reports (Colliver, San Francisco Chronicle, 7/6).
Members of WellPoint Health Networks' Blue Cross of California subsidiary were charged as much as five times their usual monthly premiums because of technical problems with WellPoint's automatic bill paying system (California Healthline, 5/5). The error affected 43,092 credit card customers and 1,642 debit card customers with individual policies, the Chronicle reports (San Francisco Chronicle, 7/6).
DMHC said Blue Cross failed to take necessary steps to prevent the computer error and detect the overcharges. In addition, the company did not alert regulators of the problem and did not inform customers of the overcharges in a timely manner, DMHC said (Rapaport, Sacramento Bee, 7/6). DMHC learned of the mistake through media reports eight days after the billing error occurred, rather than from the company, according to the San Diego Union-Tribune.
The members have been reimbursed for the premium overcharges, but Blue Cross is still processing overdraft and related fees (Skidmore, San Diego Union-Tribune, 7/6).
Blue Cross spokesperson Robert Alaniz said the company has "put in place safeguards" to prevent the error from reoccurring.
In a statement, DMHC Director Cindy Ehnes said, "These substantial fines send a message to health plans that we require them to be constantly on guard to protect consumers from computer-related mistakes, such as those that impose unjustified charges or violate their rights to privacy."
DMHC in June fined Kaiser Foundation Health Plan $200,000 after a former employee posted confidential patient information on her blog (San Francisco Chronicle, 7/6).