Judge upholds $100,000 ruling by Del. insurance commissioner

The News Journal, April 26, 2008

A Superior Court judge has upheld a $100,000 fine against Blue Cross Blue Shield of Delaware, which the state insurance commissioner assessed last year after finding the company failed to process thousands of medical claims within a state-mandated time period.

The decision by Judge Peggy Ableman affirms a September ruling by Insurance Commissioner Matt Denn, which found that in the first six months of 2006, Blue Cross Blue Shield of Delaware, the state’s largest health insurer, failed to process 10,467 health insurance claims within the required 30 days.

The claims were “clean,” meaning they included all the information necessary to be processed. At the time, the company also lacked formal procedures for tracking the progress of claims, Denn determined.

Blue Cross Blue Shield of Delaware, in a written statement Thursday, said it “continues to stand behind its strong track record of paying claims promptly.”

The company handles more than 5 million claims a year, processing claims in an average of less than four days, it said.

At an administrative hearing last May before Denn, a company executive testified that more than 98 percent of claims are processed within 30 days.

The insurer, in its statement, said it has spent $2.5 million on new technology to speed processing, and increased staffing. The company says it has “materially enhanced our claims management tracking system to ensure claims are paid promptly.”

The insurer left open the possibility of filing an appeal, saying it is reviewing its options.

Denn, who made the prompt payment regulation one of his first priorities after being elected in 2005, said he was pleased with the court decision.

“This will help with my effort to ensure that health insurance claims are paid on time,” he said.