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OMIP Offers Regence BlueCross BlueShield $2.1 Million Agreement

Regence would have to deduct the cost of reconciling the books for its last-minute request to be paid for claims as old as 2010 to get money from a federal high-risk account that dissolves at the end of the year.
December 18, 2014

The Oregon Medical Insurance Pool has agreed to pay $2.1 million to Regence BlueCross BlueShield to resolve outstanding claims the insurance company says it’s owed for administering the Federal Medical Insurance Pool.

But under the resolution passed Wednesday in Wilsonville, Regence must agree to pay for all the extra staff time, the attorney fees for the Oregon Department of Justice and the special audit conducted by the accounting firm Moss Adams after the health insurer, which was the administrator for the high-risk pool, came forward in September with the claims, some of which date back as far as 2010.

The contractual statute of limitations on the claims may have expired, but after an audit from Moss Adams, OMIP found no evidence that the late reporting was anything more than an oversight and sloppy accounting from Regence.

The Federal Medical Insurance Pool, or FMIP, was a high-risk insurance program created by the Affordable Care Act that stood as a stop-gap measure until the launch of Cover Oregon and the guaranteed issue of insurance to all comers, regardless of their health status. The program stopped operation a year ago, and the federal government will close the account on Dec. 31.

The payout will allow OMIP to settle the books on a program that was a godsend to consumers who were refused service by traditional insurance companies because of high medical claims and pre-existing medical conditions such as cancer which deemed their policies unprofitable.

Regence and OMIP are running up against that hard deadline at the end of the year, or else all money left in the account for the federal pool will revert back to the U.S. Department of Health & Human Services. The number of back claims from Regence fell to just under the amount remaining in the federal fund. Regence must agree to not ask for any additional money from the federal pool and indemnify OMIP against any future problems that might arise.

If Regence chooses not to cooperate and accept the terms laid out by the OMIP board, it will have a difficult time collecting any money at all from this pool since the account will be closed.

“There is no leniency from the federal government,” said board chairman Robin Richardson, a Moda Health executive. “We already had one extension. They are not giving any more extensions.”

An additional $8.5 million in disputed claims are left to be resolved between Regence and OMIP in the new year, including the longer standing Oregon Medical Insurance Pool program. These claims were from two state-financed insurance pools, which assessed Oregon’s insurance companies for each person they insured.

“The OMIP audit will take place in the month of January,” said OMIP administrator Don Myron.

OMIP might take a more rigorous look at Regence’s claims from those accounts because any leftover money would be credited back to the participating insurance companies.

Faced with a tight Dec. 31 deadline for the federal pool, and the reality that OMIP had the option of giving Regence the money or returning it all to the feds, OMIP only ordered Moss Adams to conduct a sampling audit, which looked at a tiny fraction of Regence’s alleged outstanding claims.

That reconciliation audit actually showed Regence was owed a few thousand dollars more than it requested.

But on Wednesday, it was reported that Regence had asked for an additional $266,000 for claims from 2010, and OMIP had no time to verify those claims through the auditor.

Chris can be reached at [email protected].