THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, April 14, 1995 TAG: 9504140530
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY LON WAGNER, STAFF WRITER
LENGTH: Medium: 52 lines
Trigon Blue Cross Blue Shield's past practices have again come back to hurt it.
This time, the state's largest insurer has been fined $950,000 by the State Corporation Commission for advertising and claims practices.
The fine is separate from a $5 million fine the insurer paid last year to settle claims that Trigon misled its policyholders about their insurance co-payments.
``These weren't just oversight violations,'' said Ken Schrad, a spokesman for the State Corporation Commission. ``These were enough to indicate a general business practice, so that's why they decided to get tough with Trigon.''
The SCC's allegation of violations results from an examination of Trigon's conduct from July 1, 1991, to June 30, 1992.
Trigon agreed to pay the fine but did not admit to the allegations in the settlement with the SCC's Bureau of Insurance. Trigon President Phyllis Cothran did not deny the violations.
``We came under a new set of advertising regulations after becoming a mutual insurance company in 1991,'' Cothran said, ``and for the first year we did not have our policies as tight as we should have.''
The bureau alleged that Trigon may have misled customers with its advertising and was not providing policyholders with notices required by the SCC's Unfair Claims Settlement Practices Regulations.
One violation, Cothran said, stemmed from Trigon's claim that its insurance policies were ``universally accepted.'' Trigon's policies are not accepted throughout the world, she said, so the company could promote its policies only as ``widely accepted.''
The Bureau of Insurance also found that Trigon had not paid interest to out-of-state hospitals and doctors on claims it waited longer than 15 days to pay, a requirement under state law. Cothran admitted that Trigon had not been making the interest payments, and the company agreed to repay $412,000 to health care providers as part of the $950,000 settlement.
In addition to the $5 million settlement last year and this latest fine, Trigon repaid at least $18 million to policyholders this year as part of an agreement with the SCC.
Those repayments, and the $5 million fine, were to settle SCC allegations that Trigon overbilled customers during a 10-year period by the way it calculated co-payments. by CNB