Illinois regulators fine Blue Cross parent $605,000 for alleged violations related to in-network directories

Illinois insurance regulators have fined the parent company of Blue Cross and Blue Shield of Illinois $605,000 for alleged violations of the state’s network adequacy and transparency law.

The fine, announced Thursday against Health Care Service Corp., cites everything from underestimating the travel time and distance for plan beneficiaries to reach a medical office to not updating provider information on the Blue Cross website.

Blue Cross, the largest health insurer in Illinois with more than 8 million members, was also cited for no longer offering printed copies of provider directories.

“The law requires health insurance companies to have a provider network that meets proper time and distance standards for consumers to receive care, as well as up-to-date, accurate directories identifying which providers are in-network,” Dana Popish Severinghaus, director of the Illinois Department of Insurance, said in a news release.

The Illinois Department of Insurance, which oversees the insurance industry in the state, uses periodic market conduct examinations to review company compliance with regulations. The network adequacy examination of Blue Cross ran from November 2020 to March 9, when the findings — and the fine — were made public.

Blue Cross paid the fine and agreed to take corrective action, according to the state, which will conduct follow-up exams to make sure the insurance company remains in compliance.

“We worked with the IDOI throughout the audit to resolve remaining areas of concern and develop plans to adjust some of our operational systems and processes,” Dave Van de Walle, a spokesman for Blue Cross and Blue Shield of Illinois, said in a statement. “Market conduct exams are a normal part of doing business and such exams are just one of the ways we actively work with regulators to ensure we are best serving the needs of our members.”

In March 2022, Blue Cross was fined $339,000 for failing to provide notice of material change to state insurance regulators for 244 days after terminating its contract with Springfield Clinic, a large, private medical clinic serving about 100,000 patients in central Illinois.

Blue Cross paid that fine last March, the company said Friday.

rchannick@chicagotribune.com