Whistleblower Claim Againist North Dakota Blue Cross Blue Shield Alleging Illegal Insurance Practices

Whistleblower_Claim_Againist_Blue_Cross_Blue_ShieldA former medical director at Blue Cross Blue Shield of North Dakota (BCBSND) filed a whistleblower claim against the company, saying he was fired for pointing out illegal insurance practices that could be costing the company’s customers millions of dollars in higher premiums and out-of-pocket costs.

According to the lawsuit filed on Tuesday in Cass County District Court, Dr. Kenneth Fischer, former director of behavioral health for Noridian Mutual Insurance Co. discovered the company allowed some members to receive more benefits than others, even though they were on the same plan, WDAY News (Fargo) reports. The company overpaid providers out of employer accounts then failed to recover the overpayments. The lawsuit claims the violations could lead to repayments and penalties in the millions of dollars, as well as criminal liability.

Fischer, who had no experience in the insurance industry when he was hired in 2011, said he didn’t fully understand Blue Cross Blue Shield’s business practices until almost three years later. He discovered what he believed to be faulty practices in his division, but soon found these were part of a “significant and widespread” pattern throughout the company, according to WDAY.

Fischer’s lawsuit alleges he told Jacquelyn Walsh, vice president of clinical excellence and quality, about his concerns in 2012. He repeated these concerns about alleged illegal insurance practices in a November 1, 2013 meeting with Walsh, and in a December 10 meeting with Noridian’s chief compliance officer, WDAY reports. Fisher told the compliance officer that the company was violating both the Employee Retirement Income Security Act and the Federal Employees Benefit Health Plan.

Among the practices Fisher questioned:

• payment for thousands of claims previously denied by a medical director, and sometimes by reviewers and appeals reviewers

• incorrect “place of service” coding

• no training or oversight for some the staff who reported directly to Walsh

• no plan to replace the expertise of key employees who had left

The lawsuit says the company had pressured him to resign by listing “unfiled and uninvestigated” charges against him in an external human resources investigation, but Fisher claims he never saw the substance of the allegations, according to WDAY.


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