State to get $2.35M refund from Blue Cross
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Blue Cross and Blue Shield of Montana is set to refund about $2.35 million to the state after an internal audit of the state's Health Care and Benefits Division found that Montana has overpaid the insurer to administer parts of its health insurance plan since 2002. Division administrator Connie Welsh said this week the overpayment was discovered during an investigation spurred by the Gov. Brian Schweitzer's request for additional cost savings and efficiencies. The money will not be refunded to policyholders, but will be deposited in the employee group benefits fund, from which claims are paid. Welsh said the refund will not significantly affect rates but will provide a little extra cushion. The state typically pays Blue Cross between $2.5 million and $3 million annually for benefits administration. Most of the overpayment — around $1.5 million of the $2.35 million — was made in the past three years. The overpayment was caused by an incorrect formula being used to calculate per-person administration fees on one of four health insurance options available to state workers. Two of those options are from Blue Cross. Blue Cross spokesman Tim Warner said times are tight for the insurer, "but the right thing to do is reimburse the state and move forward and be sure it doesn't happen again."