Blue Cross Blue Shield of Illinois, the largest health insurer in the Land of Lincoln, has agreed to pay $25 million to settle allegations that it denied coverage to sick kids who needed nursing care.

Rather than pay the claims of these children, it passed them off to the state’s Medicaid program. Blue Cross’ actions cost the program around $12 million, says the Illinois Attorney General Lisa Madigan.

“Blue Cross Blue Shield’s inappropriate denial of legitimate claims placed an undue burden on the state’s finances,” Madigan said. “My office is committed to holding health care insurers accountable on behalf of the people of Illinois for this type of deception and fraud.”

The $25 million will be divided thusly: $14.25 million to the state of Illinois; $9.5 million to the federal government to reimburse its portion of the Medicaid costs; $1.25 million to Illinois consumers who were denied coverage by Illinois Blue Cross but did not receive Medicaid coverage.

In spite of the $25 million settlement, BCBS denied any inappropriate conduct:

This dispute began many years ago when we reviewed certain claims and determined that the benefits sought were not covered by the applicable insurance plans and policies… These plans and polices determine which benefits are covered and which are not. Several years ago, in cooperation with the state attorney general, we expanded our explanation of benefits to ensure that our members understood what nursing benefits are covered under their plans.

Illinois Blue Cross settles allegations that it denied sick kids coverage [Chicago Breaking Business]

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