Wellmark to repay erroneously denied claims, with interest

Up to 18,000 Iowans could receive a check from Wellmark Blue Cross and Blue Shield after the insurance company discovered a decade of erroneously denying claims.

Spokesman Rob Schweers said Wellmark's legal department started an investigation after the errors were discovered “during the normal course of business.”

The review concluded that some claims for health services were denied because some health condition amendments –  or riders – were incorrectly applied.

Wellmark voluntarily reported the error today to the Iowa Insurance Division and the South Dakota Division of Insurance.

Schweers said up to 100,000 claims in the 10 years since Jan. 1, 2000, are potentially affected in Iowa and South Dakota.

The 18,000 affected policy-holders in Iowa and 6,000 in South Dakota each could have multiple claims.

He did not know the total dollar amount involved, but pointed to the following:

• The majority of the affected claims have less than $100 owed.
• 236 of the claims are owed about $5,000 or more.
• The 100,000 claims is less than one-tenth of 1 percent of the 202 million claims processed during the 10-year period.

Schweers said most of the larger claims were likely to hospital or health care practices.

Wellmark will pay back the claims, with interest, in coming months.

Schweers said affected policy-holders will receive a letter in the next week to 10 days. Checks for the claims will follow later this year, with the interest checks mailed separately.

“We want to make sure we make it right,” he said. “It's our mistake and their money.”

Payment will be made to the policyholder or health care provider, depending on the circumstances.

The error only affected claims submitted under individual and Farm Bureau health insurance policies underwritten before Aug. 2007.

So plans issued through groups or employers, Medicare Supplement, Medicare Advantage, short-term major medical plans or those underwritten after Aug. 1, 2007, are not affected.

Schweers explained the error with an example of a college knee injury that was included in a rider to lower premiums.

A policy-holder with the rider who later injured his right leg could have filed a claim that was erroneously denied, based on the rider, even though it should have been covered.

Schweers said the riders were not for any particular condition.

Anyone who does not receive a letter, but believes they should have, can call the Wellmark number on the back of their insurance card or call: 1-800-847-1506.