Washington Insurance Commissioner Fines Health Insurer

Wshington State Insurance Commissioner Mike Kreidler has fined Regence BlueShield (Regence) $100,000 for denying contraceptive coverage to 984 women.

Kreidler learned about the violation from a consumer who contacted his office to complain. Regence covered her choice of prescription contraceptive – the intrauterine contraceptive device (IUD) – but denied coverage for its removal.

The company has reprocessed and paid all similar claims from Jan. 1, 2002-May 25, 2010, totaling $148,740.37.

According to Regence, it covered the insertion of the IUD, but removal of the device fell under a different benefit that required the service be “medically necessary.” Regence stated that removal of an IUD was not covered simply because the device was outdated or the woman wanted to become pregnant.

This response prompted Kreidler to order Regence to reprocess all 984 contraceptive claim denials going back to Jan. 1, 2002, when Washington state’s contraceptive regulation took effect. According to this law, all state regulated health plans with comprehensive prescription drug coverage also must cover prescription contraceptives and the medical services associated with their removal.

In addition to the $100,000 fine, Regence also must pay eight percent interest to the policyholders on each of the claims that were improperly denied.

“There’s an important lesson here,” said Kreidler. “If you believe you’ve been unjustly denied coverage, don’t just accept it, call us. Of the 984 women who were denied contraceptive coverage by Regence, only three appealed the decision – and all the denials were upheld. One woman’s call to our office resulted in coverage for nearly a thousand other women.”

Source: Washington State Office of the Insurance Commissioner.