“They are using our money, so overpaying there is no consequence to them………So it is easier for them to pay the bills as they come in, whether they are appropriate or not……………..”
Robotics firm: Blue Cross got lazy, ripped us off Sues insurer over paying inflated, fraudulent medical bills
A Southfield-based robotics company and Fiat Chrysler subsidiary claims it was ripped off by Blue Cross Blue Shield of Michigan when the insurance giant “knowingly” paid inflated and fraudulent medical bills while administering the company’s self-insured employee health plan.
Comau, an Italian company with North American headquarters in Southfield, says in a federal lawsuit filed Sept. 6 that The Blues failed its fiduciary duty when it cost the company “many thousands of dollars in overpayments.” A lawyer for Comau said Thursday that the company still needs information from Blue Cross to determine the extent of its losses.
The payments came out of Comau’s funds – not out of Blue Cross’s coffers – because companies that have self-insured health plans pay most claims out-of-pocket, with insurance companies responsible for administering those plans and processing the claims in exchange for fees. Companies buy separate “stop loss” coverage to protect against extraordinarily large claims.
Self-insured health care coverage, also known as self funded coverage, is a different type of arrangement than when companies pay premiums to insurance companies for full coverage. Under those plans, the insurers them- selves are financially on the hook for medical bills.
Comau had about 1,100 employees in Michigan covered by the self-insured plan administered by Blue Cross. The robotics company is headquartered in Turin, Italy.
Comau’s lawyer, Aaron Phelps of Varnum, suggested in a phone interview that plain laziness may be why Blue Cross failed to negotiate down the medical bills.
“Doing less is easier than doing more,” he said. “They are using our money, so overpaying there is no consequence to them. If they negotiate the bills down, that takes effort, they actually have to do their job, and they don’t evidently want to do that.
“So it is easier for them to pay the bills as they come in, whether they are appropriate or not,” he said.
Helen Stojic, a Blue Cross spokesperson, told the Free Press on Friday that the insurance company had yet to be served Comau’s lawsuit.
“Once we receive it we will conduct a full investigation, but we deny any allegations of fraud on our part and will see them in court,” she said.
The lawsuit, filed in U.S. District Court in Detroit, says Comau learned of what it called the insurance company’s dereliction of duty this year after a former Blue Cross Blue Shield of Michigan account manager filed a whistleblower lawsuit.
Dennis Wegner of Macomb County says he worked as a Blue Cross account manager for 18 years until Nov. 14, when The Blues fired him after he reached out to state regulators about what he calls Blue Cross’ repeated behavior of forcing some customers to pay excessive medical bills.
These billings included routine urine tests that cost $10 or less to perform, yet which one medical provider billed for $5,000 to $15,000, according to Wegner’s lawsuit in Wayne County Circuit Court. The lawsuit did not name the test provider.
Wegner’s lawyer did not return repeated messages for comment. Comau’s lawyer, Phelps, said he last heard that Wegner’s whistleblower claim against Blue Cross moved to arbitration.
Wegner’s lawsuit, filed in February in Wayne County District Court, says he found excessive billing patterns by other medical providers in addition to the urine tester, including the case of one Blue Cross customer who paid more than $600,000 over a two-year period. After alerting Blue Cross to that situation, and with the customer’s knowledge that overbilling had occurred, Blue Cross reimbursed the customer for the overcharges.
Wegner went on to research billing records for two other Blue Cross customers, his lawsuit said, finding similar overcharges totaling $75,000 and $125,000. But when he notified Blue Cross, he was told to “stand down” and not alert the customers that were hit with the excessive charges, according to his lawsuit.
Wegner “believes that the fraudulent overcharging was widespread and would have cost (Blue Cross) significant funds to correct and reimburse all of (its) customers who had unwittingly been forced to pay grossly inflated and fraudulent charges,” the lawsuit said.
According to Comau’s lawsuit, Wegner has confirmed that the robotics company was among the victims of Blue Cross’ payment of excessive claims.
“Comau never imagined, nor had reason to imagine based on the plan documents, that (Blue Cross) would knowingly pay fraudulent and improper claims,” the lawsuit says.
A Blue Cross spokesperson offered no response regarding claims in Wegner’s whistleblower complaint.
Comau is one of several organizations that previously sued Blue Cross Blue Shield of Michigan over alleged hidden fees in the administration of self-insured health plans, a violation of the Employee Retirement Income Security Act, commonly called ERISA. The robotics company’s 2016 case against Blue Cross alleging hidden fees was settled out of court.
The first hidden fees case to proceed through trial, brought by Hi-Lex Controls, concluded in 2014 with an upheld $6.1million judgment against Blue Cross.
The Varnum law firm, which has offices throughout Michigan, says it has represented more than 90 Blue Cross self-insured customers in hidden fees cases.
Contact JC Reindlat 313-222-6631 or jcreindl@freepress.com. Follow him on Twitter@jcreindl. Read more on business and sign up for our business newsletter.
