Faced with the threat of a lawsuit, the Jindal administration decided Monday to refund an estimated $4.48 million to some state health insurance program enrollees.
The refunds involve out-of-pocket expenses paid as a result of changes the state Office of Group Benefits implemented Aug. 1 without going through the approval process spelled out in state law.
Group Benefits published an “emergency rule” Sept. 30 seeking to retroactively apply the changes, which included prior authorization of some medical procedures and a heavier reliance on generic drugs.
On Monday, Commissioner of Administration Kristy Nichols said the changes would now go into effect Sept. 30 — the day the administration published the emergency rules.
The decision came after the Retired State Employees Association talked about filing a lawsuit, challenging the administration’s “after-the-fact” approval attempt.
Exactly how many of Group Benefits’ 230,000 state employee, teacher, retiree and dependent members will get refunds was not disclosed. The refunds will cover out-of-pocket expenses they paid between Aug. 1 and Sept. 29, officials said.
Group Benefits chief executive officer Susan West said the goal is to have the money back into members’ hands within 60 days.
Nichols made no mention of the lawsuit in announcing the sudden change. “We heard the financial concerns of our members and legislators and are willing to work with them by delaying the impact of these changes,” Nichols said in a news release announcing the decision.
The administration increased the Group Benefits premium effective July 1 then added the other changes Aug. 1 as part of plans to stabilize the finances of the insurance program. The fund had a $500 million reserve two years ago, but it now sits at less than half that and continues to deteriorate monthly as claims payments exceed revenues coming in. The Jindal administration cut premiums by nearly 9 percent during the two years, which contributed to the faster reduction in the reserve account.
West said the Group Benefits refunds will have a negative impact on program finances. “Any loss of savings will have an impact on those (financial) projections,” she said.
The lawsuit threat came from groups, such as the Retired State Employees Association, that questioned whether the administration could use the emergency rule to make changes in the medical and pharmacy plans. “All we wanted to do was for them to get it right, which apparently they have decided to do,” said Frank Jobert, executive director of the Retired State Employees Association. He said he was pleased Group Benefits members would get some relief.
Administration officials disagreed about the need for publishing the benefit changes.
The refund process varies depending on the type of cost incurred, West said.
Members who paid higher pharmacy co-pays between Aug. 1 and Sept. 29 will automatically receive a reimbursement check in the mail. No action is necessary.
Members who incurred increased pharmacy costs based on exclusions must submit an appeals form to MedImpact, the contract pharmaceutical plan.
Blue Cross and Blue Shield of Louisiana will reprocess claims for members who incurred increased medical costs through their provider during the two months. If members incurred costs that were not submitted through a provider — for instance, paying out of pocket — they must submit an appeal request form to Blue Cross and Blue Shield. The forms can be found on the OGB website at www.groupbenefits.org .
West said more of the claims will involve medical services. “There were some claims for which no prior authorization was obtained. Those are going to be readjudicated,” she said.
The other, more controversial part of Group Benefits changes involves new health insurance plan offerings that are scheduled to go into effect in 2015. Group Benefits members have until the end of November to enroll in one of a variety of new plans.
Group Benefits enrollees have been inundating legislators’ offices with calls, complaining about what’s ahead for them, including increased deductibles, copays, co-insurance and other out-of-pocket expenses.