SPRINGFIELD, Ill. (NEXSTAR) — Political pressure is mounting for the Pritzker administration to take swift action to regulate Blue Cross Blue Shield of Illinois after a Target 3 investigation revealed a string of consumer protection concerns stemming from a contract dispute the state’s largest insurer has with Springfield Clinic.

Blue Cross Blue Shield of Illinois has justified its hardball negotiation tactics as an effective strategy to drive reimbursement rates lower at Springfield Clinic, but patients with severe and urgent medical issues are becoming the casualties of the insurance company’s leverage war.

When Blue Cross Blue Shield of Illinois (BCBSIL) kicked hundreds of Springfield Clinic doctors and nurse practitioners out of its network, it effectively blocked 55,000 of its paying customers from visiting their preferred specialists in critical fields, such as obstetricians and radiation oncologists. Springfield Clinic employs most of the area’s specialists in those fields, and often accepts referrals from other primary care doctors at other hospital groups in the capital city.

When patients with Blue Cross insurance plans went to find new in-network doctors, they were forced to navigate a dead-end directory that was riddled with errors, despite legal requirements for the insurer to update its directory every 30 days. If patients found a new doctor that was accepting new patients, they often would have to drive farther or wait longer than the legally required distances or times before they could get an appointment.

In many cases, desperate patients opted to pay higher out-of-network costs just to stay with their Springfield Clinic doctor. In other cases, cancer patients or pregnant mothers who are guaranteed continuity of care protections in the law still saw their medical bills soar under inflated out-of-network prices.

“I’m so upset with the insurance companies,” Rep. Sue Scherer (D-Decatur) said. “The pressure needs to go on the governor’s office to do the things within his power.”

Scherer, a former public school teacher, couldn’t understand why an insurance company would pick this moment — during a global pandemic — to argue for paying doctors less.

“It makes no sense,” she said. “We’ll just let people die, I guess. And then they don’t have to pay to give them their coverage.”

Our reporting also raised questions about the adequacy of Blue Cross Blue Shield of Illinois’ regional network of providers. According to patient estimates provided by BCBSIL, its network lacks enough obstetricians and radiation oncologists to satisfy the legal limit for patient-to-doctor ratios set forth in the Network Adequacy and Transparency Act of 2017.

One of Pritzker’s Republican challengers, Aurora Mayor Richard Irvin, responded to our investigation. His campaign proposed three steps the Pritzker administration could take to remedy the situation:

In light of this startling news that has left Illinoisans without proper care under the state’s watch, the Irvin for Illinois campaign is calling on the Pritzker Administration to take the following steps:

• Swiftly investigate Blue Cross Blue Shield’s compliance with the state’s network adequacy requirements, and impose fines for every day it is in violation.
• Order Blue Cross Blue Shield to provide true continuity of care coverage as required by state law and re-adjudicate previous claims that should have been considered in-network.
• Consider capping Blue Cross Blue Shield’s enrollment if the company does not swiftly come into compliance with provider network adequacy requirements.

“I think this really is incumbent on Governor Pritzker, his Department of Insurance, to make sure that the plans that they’re offering are living up to what state law requires them to do,” Irvin’s running mate Rep. Avery Bourne (R-Morrisonville) said on Tuesday.

Bourne claimed the Irvin campaign’s proposals were “things that the administration could fix today, and if we were in office, we could fix today,” but the Governor’s office and Department of Insurance pointed to specific portions of the law that provide insurance companies ample time to rebut and respond to investigations under “due process” provisions before the state can levy fines.

Pritzker’s office bristled at criticism from Republicans who have often taken campaign contributions from — and voted in line with — with the insurance industry during legislative fights, and pointed to a number of other areas where the governor has advocated for expanding health care access.

“A network adequacy study is currently underway and the administration will closely review those findings and assess whether there is a need to strengthen the consumer protections currently in law,” Pritzker’s spokeswoman Jordan Abudayyeh said in an email. “The Governor firmly believes healthcare is a right, not a privilege and that’s why he’s worked to expand healthcare access across the state.”

The Department of Insurance has begun reviewing the updated BCBSIL directory of doctors to determine its network adequacy, though it has been careful not to confirm an active investigation. Other sources familiar with the matter say the agency has already opened a broader market conduct exam to investigate and potentially fine Blue Cross Blue Shield for violating consumer protections in the law. A spokesperson says the agency cannot comment on ongoing investigations due to confidentiality laws that favor insurance companies while they are under review.

“The Department is unable to comment on or confirm the existence of market conduct examinations until completed so as not to compromise our investigations,” DOI spokeswoman Caron Brookens said in an email.

“Market conduct exams are one of the tools available to the Department to examine the market conduct and practices of insurance companies regulated by the Department,” she said. “If the integrity of the market conduct exam process is eroded, consumers could lose the protection of regulatory oversight. Companies can be fined and/or ordered to take remedial actions as a result of market conduct exams which allow the Department to examine health insurance companies’ practices, including claims, underwriting, handling of complaints and network adequacy.”

State records show the Department of Insurance has leveled $3.9 million in fines against insurance companies under the Pritzker administration, including a $325,000 fine assessed in 2020 against Health Care Services Corporation, the parent company of Blue Cross Blue Shield, for failure to provide adequate mental health care coverage.

Illinois law allows Blue Cross Blue Shield of Illinois to operate as a “not-for-profit” entity, even though 2016 court records show it stockpiled $10.2 billion in profits and paid out big bonuses to top executives.

The year before, California regulators revoked the tax-exempt status for the Blue Cross Blue Shield subsidiary in that state.

“If it worked in California, it can work in Illinois,” Scherer said. “We definitely are going to take a look at taking away their tax exempt status.”

Pritzker, who has called for closing corporate tax loopholes, has not commented on the tax-exempt status for the state’s largest health insurance company.

“Maybe we can get a a subject matter hearing ASAP, where they have to come and face the music,” she said. “It’s gonna need to move right to the top of the priority list.”

One day after Scherer’s call to action, the House Insurance Committee scheduled a subject matter hearing to look into the matter. Reps. Thaddeus Jones (D-Calumet City) and Bob Morgan (D-Deerfield), the chair and vice-chair of the committee, declined to comment.

It remains unclear whether the Director of the Department of Insurance will testify before lawmakers. Governor Pritzker appointed Dana Popish Severinghaus, a former lobbyist for Blue Cross Blue Shield of Illinois, to head up the state agency in January of 2021.

Pritzker’s aides pointed fingers at legislators and suggested it was their responsibility to take stronger action to enhance the enforcement measures in the law. Abudayyeh pledged that Pritzker would fight for consumers “when policy decisions are being made” in the House and Senate.

Pritzker’s Department of Insurance could have authored rules to more strictly enforce the laws that regulate the insurance industry. In the five years since the Network Adequacy and Transparency Act passed into law, the agency has not written any rules to carry it out or enforce it.

The Department of Insurance has said it would be “inappropriate and unethical” to get involved in a private contract dispute between Blue Cross Blue Shield and Springfield Clinic.

“I think that you can enforce the law without choosing a side,” Bourne said. “I mean, the law is law, and every party should be following the law.”