After a thorough investigation, the Colorado Division of Insurance (DOI) has decided to fine Bright Health $1 million dollars for neglecting its failures and multiple complaints. Continue reading to learn more about this operational fiasco.

The Colorado Division of Insurance said it received more than 100 complaints from consumers and health care providers about the health insurance company.

Colorado insurance regulators have fined Bright Health $1 million after investigating more than 100 consumer and health care provider complaints indicating systemic operational problems at the health insurer.

The complaints included reports of the insurer’s failure to properly pay claims from health care providers and of communication problems with health plan members, the state Division of Insurance said this month.

Regulators said they also received complaints that Bloomington-based Bright Health wasn’t accurately processing consumer payments and there were delays in processing claims for physical and behavior health coverage.

The insurer has agreed to address the issues, which could result in half the fine being waived.

“With the number and variety of complaints the [Division of Insurance] received, our investigation had to dig deep into many facets of their business,” Colorado Insurance Commissioner Michael Conway said in a statement.

“With this fine and the formal agreement outlining how Bright is going to fix their problems, they should not only be able to clear their backlog of complaints and payment issues, but be in a better position to serve Colorado consumers going forward.”

Bright Health said in a statement that it was focused on maintaining strong relationships with consumers and health care providers, and addressing any concerns they and regulators might raise.

“Given the complexity of the healthcare market, we appreciate the opportunity to focus on areas of improvement as we serve our members and providers,” the company said.

“Throughout the assessment, we have actively collaborated with the [Division of Insurance]. Most importantly…we have made and continue to make meaningful improvements in our operations intended to address the identified areas.”

The regulatory action is the latest setback for Bright Health, a fast-growing health insurer funded in part by Minnesota’s largest-ever initial public offering of stock. After a series of disappointing earnings releases since last summer, the company has seen its stock price plunge, the departure of two top executives and the elimination of about 150 jobs.

The Colorado regulators identified at least 850 instances in 2021 — and at least 50 more cases so far in 2022 — of Bright Health failing to promptly pay “clean claims,” where health care providers submitted correct and complete information for reimbursement.

By early 2021, health care providers had repeatedly notified Bright Health that the insurer was failing to pay clean claims submitted electronically within 30 days, as well as those submitted by other means within 45 days, according to a final agency order dated April 1.

Here’s a breakdown of the complaints:

  • Colorado regulators said they’ve received at least 30 consumer complaints about Bright Health’s failure to communicate with subscribers about claims. In some cases, the insurer didn’t communicate in a timely manner or failed to let subscribers speak with a supervisor upon request.
  • The insurance division said it also received at least 25 consumer complaints detailing how Bright Health failed to correctly apply consumer payments or process consumer requests to cancel coverage. Many of the complaints alleged the insurer “failed to apply consumer payments correctly to the insured’s account, or applied erroneous charges,” the final agency order said.
  • The division said it received at least 60 consumer complaints that Bright failed to process and approve claims in a reasonable time. In many cases, the insurer later acknowledged the claims should have been approved the first time.

“In addition to the claims and communication issues detailed above,” regulators said, “Bright failed to utilize the American Society of Addiction Medicine (ASAM) criteria for the placement, medical necessity and utilization management determinations for people with substance use disorder and opioid use disorder.”

Half of the $1 million fine must be paid now with the remainder stayed upon Bright’s improvement and compliance with various improvement steps and metrics. Those include accurately paying past claims and resolving complaints in a reasonable time.

Regulators also will be watching for resolution of claims disputes from health care providers and a significant drop-off in complaints.

“Bright Health has acknowledged these violations and agrees to the requirements being issued,” the Colorado Division of Insurance said.

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