Blue Cross Blue Shield ND Faces Whistleblower Lawsuit Filed by Ex-Medical Director

Date Published:

A former medical director at Blue Cross Blue Shield of North Dakota filed a whistleblower lawsuit against the company on Tuesday, WDay 6 News reports. Dr. Kenneth Fischer alleges that he was fired from the company after speaking out about illegal insurance practices that may cost customers millions in higher premiums and out-of-pocket costs. The suit was filed in Cass County District Court.

Dr. Fischer, who was the director of behavioral health for Noridian Mutual Insurance Co. doing business as Blue Cross Blue Shield North Dakota, alleges in his lawsuit that the company gave some members more benefits than others despite being on the same plan. The suit alleges that Blue Cross Blue Shield ND used employer accounts to overpay provides and subsequently failed to recover the overpayments. The company had no legal basis for these actions and did not make any effort to recover the money, the lawsuit alleges.

The whistleblower suit alleges that Fischer discovered what he believed to be faulty practices in his behavioral health area, but then realized that it was a “significant and widespread” problem in the company, “later determined to infect the entire book of business of BCBSND.”

According to WDay6 News, Fischer’s lawsuit alleges that he approached Jacquelyn Walsh, vice president of clinical excellence and quality, about these practices in 2012 but these concerns were followed by months of inaction. Allegedly, he had a meeting with Walsh last November in which he disclosed the illegal insurance practices he discovered. Among other things, he said that “Thousands of claims had been wrongly paid that were previously denied by a medical director, and sometimes reviewers and appeals reviewers.” He also accused the company of a decade-long culture of “workarounds” was in place that skipped behavioral health analyses and claims. In another meeting, Fischer informed the compliance office that the company was violating both the Employee Retirement Income Security Act and the Federal Employees Benefit Health Plan, the lawsuit says.

The suit also claims that the alleged violations may lead to repayments to employer groups and millions of dollars in penalties.