Again? BCBSIL Fined for Violating the ISMS-Initiated Network Adequacy Law

March 17, 2023

The Illinois Department of Insurance (IDOI) recently levied a $605,000 fine against the parent company of Blue Cross and Blue Shield of Illinois (BCBSIL) for violating the ISMS-initiated Network Adequacy and Transparency Act (NAT Act).

IDOI’s targeted exam for network adequacy, which began in November of 2020, revealed that BCBSIL had violations of the NAT Act and other state and federal laws. The insurer failed to:

  • Properly apply maximum time and distance standards to reflect proper availability of providers.
  • Audit for each network plan at least 25% of its provider directories to verify the accuracies of the provider directories.
  • List all available specialty providers for HMO plans in its provider directories or notate that authorization may be required to access some providers.
  • Make its provider directories clear for consumers to determine which directory applies to which plans.
  • Provide a written response to written inquiries and complaints within 21 days of receipt.
  • Maintain provider information on its website to reflect the current status of its providers.
  • Provide accurate and most up-to-date network adequacy information in its SERFF filings to the state.

The parent company of BCBSIL, Health Care Service Corporation (HCSC), has paid the fine and agreed to take corrective action based on the findings of the IDOI’s exam.

Previously, the IDOI assessed a fine of $339,000 to HCSC in March 2022 due to BCBSIL violating the material change notice requirement under the state’s NAT Act and failing to submit requested information following the terminating of its contract with the Springfield Clinic. This was the first time ever that the IDOI fined an insurer under this Act.

ISMS seeks members’ feedback pertaining to errors in provider directories

If you or your practice routinely hear from new patients that you are listed in a provider directory as “in-network” when in fact you don’t take that insurance, ISMS wants to hear from you! Please email Senior Vice President of State Legislative Affairs Erin O'Brien.

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