Section 2715A of the Public Health Services Act requires group health plans and health insurance companies offering group or individual health insurance coverage to make certain information available to the public.

Enrollment Data

Nearly 1.3 million Arizonans count on the health insurance products, services and networks of Blue Cross Blue Shield of Arizona. Our 71 years of service are the result of a commitment to be there for our customers, now and in the future.

Our most recent enrollment and disenrollment figures are below:

Enrollment Statistics* as of Dec. 31, 2009
Individual Business  
Small Group and Large Group (includes both insured and administered) / National Accounts / Federal Employee Program 398,532
Total Members 539,869

Disenrollment Statistics* for Calendar Year 2009

Disenrollment is based on the number of individual members and number of employer groups who have discontinued their coverage.
% of Disenrolled
Individual Business 22.3%
Small Group Business – (2 – 99 members) 19.9%
Large Group Business (100 + members) 5.2%
(includes both insured and self-insured/administered)  

* Source: Blue Cross Blue Shield of Arizona Business Informatics

Claims Data

Blue Cross Blue Shield of Arizona (BCBSAZ) has a proud history of paying claims promptly. Business practices, such as allowing providers to verify a member’s eligibility prior to rendering services, contribute to this successful record. The following table outlines the number of claims paid and the total number of claims denied in 2009.
Claims Statistics* for 2009 Calendar Year  
Total Claims Processed for Local Business & Federal Employee Program (FEP) 6,715,206
Total Claims Denied 228,344
% Of Claims Denied 3.4%
Reasons For Denial  
Claimant Not Covered at the Time the Claim Was Incurred 40.4%
Services Were Not a Covered Benefit 20.0%
Services Were Denied by Medicare 9.9%
Claim Was Received Outside of the Time Limitation Specified On the Provider Contract 3.3%
 All Other Reasons 26.4%
  100.0%

* Source: Blue Cross Blue Shield of Arizona Business Informatics

Member Rights

If a claim is denied and a member disagrees with BCBSAZ’s decision, the member has the opportunity to appeal the decision and request a second review. Our goal is to ensure our members fully understand our claims payment procedures and decisions regarding their health care coverage.

Read more about BCBSAZ’s Appeals and Grievances Process.

Claims Payment Policies and Practices

Blue Cross Blue Shield of Arizona (BCBSAZ) has established both internal and external tools to verify a member’s eligibility for a provider’s services. A provider may verify a member’s eligibility prior to providing service by contacting BCBSAZ by telephone through our interactive voice response system or online by visiting the provider section of our website at azblue.com. This step allows the provider to verify the member has an active policy and is eligible for the prescribed services.

Once the claim has been submitted, the BCBSAZ claims processing system will verify the member has an active policy and is eligible for the services rendered by the provider. Members must have an active policy in order for their claims to be paid.

BCBSAZ has a system in place within its claims processing system that detects duplicate claims payments. In addition, BCBSAZ audits a random selection of claims on a monthly basis. BCBSAZ can recover overpayments from health care providers in one of two ways:

  • BCBSAZ sends a letter of explanation to the provider and then deducts overpayments from subsequent BCBSAZ payments to the provider.
  • BCBSAZ sends a letter to the provider explaining the overpayment and requesting a refund. If the refund is not received as requested, BCBSAZ will deduct the overpayment from subsequent BCBSAZ payments to the provider.

When BCBSAZ has overpaid a member, BCBSAZ sends a letter to the member explaining the overpayment and requesting a refund. If the refund is not received, BCBSAZ will deduct the overpayment from subsequent BCBSAZ payments to the member or pursue collections efforts through an agency.

 

Rating Practices

Disclosure on Rating Practices for Individuals and Groups

Blue Cross Blue Shield of Arizona (BCBSAZ) has been on the forefront of offering quality, affordable health insurance for more than 71 years.

We work diligently to find ways to keep our premiums affordable by working collaboratively with health care providers to negotiate rates, encouraging health and wellness programs for members and keeping a sharp eye on efficiencies and improvements to business operations.

Individual Product Rate Development
BCBSAZ annually reviews rates for our Individual Under Age 65 and Medicare Supplement products to ensure that the premiums we collect are sufficient to pay for the claims we receive. As part of this review, rate adjustments are applied that reflect medical cost trends, modifications to member benefits the rate of utilization of services by the customers enrolled in our products and demographic changes in membership. If a rate adjustment is necessary, it is first calculated, signed of by the Actuarial department of BCBSAZ and then filed with the Arizona Department of Insurance. A member’s rates will vary based on tobacco usage, change in age or their own medical history.

Typically, rate revisions for Individual products are implemented on October 1, and for certain members, become effective on the member’s policy anniversary date. Rate revisions typically become effective for Medicare Supplement members on January 1.

Group Rate Development

Groups with 2-99 Eligible Employees
Rates are determined for new groups with 2-99 eligible employees by examining the eligible enrolling population (the group’s covered employees and dependents), on the group’s effective date. That population’s age/gender distribution is applied to BCBSAZ’s medical base rates and adjusted based on group level and member level information, for example, county, industry, and medical history of employees. Rate calculations for group’s 2-50 must additionally comply with Accountable Health Plan rate bands and regulations.

This group’s renewal rates may include further adjustments based on group-specific claims experience during their coverage history or newly emerging medical conditions. Renewal calculations for group’s size 2-50 must also comply with requirements in the Accountable Health Plan regulations. The premium rate also sometimes reflects a broker’s or consultant’s commission (though, occasionally a commission is paid directly by the employer to the broker or consultant).

Large Groups (100+) Eligible Employees
For large groups, BCBSAZ currently applies an Adjusted Community Rating or Experience Rating methodology based on actual claims experience of that large group. (Adjusted Community Rating allows applicants to pay the same premium for the same coverage regardless of age or health. Premiums are based on the rate determined by the geographic region’s health and demographic profile.) If the claims experience is not available, age/gender, geographic area, and industry adjustment factors are applied to establish the base rate. This is similar to the method used for smaller groups.

Separate administrative fees are calculated based on group size and the projected claims expense for the rating period. The premium rate also sometimes reflects a broker’s or consultant’s commission (though, occasionally a commission is paid directly by the employer to the broker or consultant).

Cost-Sharing and Payments for Out-Of-Network Coverage

Blue Cross Blue Shield of Arizona has a variety of health plans for Arizona individuals, families and employers. These plans are designed with many choices, including the flexibility to use out-of-network health care providers for most services.

Periodic Financial Disclosures

This Blue Cross Blue Shield of Arizona summary balance sheet, presents assets, liabilities and reserves for 2008-2009.