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Blue Cross Blue Shied of Michigan Overbillings

Summary:  Blue Cross Blue Shield of Michigan ("Blue Cross") inappropriately overcharged individual subscribers over $250,000.00 in 2013 when subscribers who were on a billing cycle other than the first of the month were billed for 16 days to bring billings to the first of the month.   This was contrary to the Blue Cross Insurance Certificate and a letter sent to subscribers on September 13, 2013.  

 I have pursued this complaint with Blue Cross  and they refuse to act.  I have pursued the complaint with the State of Michigan Department of Insurance and Financial Services (“DIFS”).  They refuse to take action.  I called the Attorney General’s office and they stated they have no jurisdiction over insurance and would merely refer my complaint to the DIFS. 

While the amount of the complaint is not determinable without specific details from Blue Cross, I estimate the amount of the overbilling to be over $250,000.00 with the number of subscribers effected to be over 30,000.  

Background and specifics: 

As a result of the Patient Protection and Affordable Care Act (“ACA”) Blue Cross sent out notices of cancellation to individual subscribers to be effective December 31, 2013.  It is believed the notices were sent to approximately 140,000 subscribers.  

Individual subscribers were billed on a monthly basis as stated in the Insurance Certificate.  Thus the billing was the same each month whether the month was 28, 29, 30 or 31 days.  

Some subscribers were billed other than on a 1st of the month billing cycle.  It is believed that over 30,000 subscribers were billed on a mid month cycle.  

Blue Cross sent a letter to these subscribers dated September 13, 2013.  The letter stated the affected  subscribers would be converted to a 1st of the month billing.   The letter stated in part “Your current monthly bill is for the period September 15 through October 14, 2013.  You have also been billed for a 15 day period of October 15 through October 31, 2013 for the adjustment to the first of the month bill period.  Your one-time temporary due date will be September 25, 2013 for the additional 15 days.” 

It is unclear whether any “Keep Fit” policies were similarly affected.  It is believed there were over 45,000 “Keep Fit” policies in effect.  

As Blue Cross was on a monthly billing cycle it would have been logical to expect to receive a billing for ½ month to bring the billing to the 1st of the next month.  

Blue Cross, without explanation and in direct contrast to the letter, billed subscribers for 16 days using the monthly billing divided by 30 and multiplying by 16.  

I pointed out the error when the bill arrived.  The error could have been easily corrected by issuing a credit on the next month’s billing.  Blue Cross refused to correct the obvious overbilling.  

Blue Cross said they would bill for 15 days and yet billed for 16 days.  Individually this is a small amount but represents in my estimation a windfall to Blue Cross, at the expense of the individual subscribers, of over $250,000.00.   The DIFS said Blue Cross sent out 34,653 subscriber letters.  Assuming the average monthly billing was $240.00, the overbilling would have been $8.00.  Thus, the overbilling by Blue Cross exceeded $250,000.00. 

I have been in contact with Blue Cross and communicated by letter and email with Daniel Loepp, the CEO.  Mr. Loepp never personally replied.   

Blue Cross had ample opportunity to correct its mistake.  Blue Cross refused to do so.  

Blue Cross did respond claiming the letter indicating billing for 15 days was a mistake.  It was not a mistake and while Blue Cross attempted to justify the improper billing, no explanation was offered for the additional one day of billing.