New disclosures show MVP denied 15.5 percent of patient claims in 2012; Blue Cross denied 7.6 percent

March 20, 2013
by Andrew Stein,

For the first time, Vermont health insurers disclosed a bundle of information about how much money they spend on executive salaries and how many patients are denied coverage.

Two health insurance companies — in accordance with Act 150 from last legislative session — divulged CEO salaries, lobbying expenses, legal fees and denial rates, among other details.

Blue Cross Blue Shield Vermont and MVP Health Care submitted their 2012 Act 150 filings earlier this month, but Cigna did not.

“They failed to meet the deadline,” said Susan Donegan, commissioner of the Department of Financial Regulation, about the health insurance giant.

Cigna, which insures employees at large Vermont companies and administers health plans for state employees, is the only Vermont health insurer that has not turned in its filing.

“We take these filings seriously, and carriers understand it’s a responsibility,” Donegan said. “We’ve communicated that to Cigna, and they are in the process of getting us that report in the next couple of weeks.”

The Vermont Public Interest Research Group, or VPIRG, pushed hard for this new transparency law. Falko Schilling, VPIRG’s consumer protection advocate, said that the information contained in the new filings was always available; it was just very difficult for the public to find. Cassandra Gekas, the former health care advocate for VPIRG and Democratic candidate for lieutenant governor, pressed for the legislation last session.

“The impetus behind this bill is we wanted to pull back the curtain on (claims denials) and let people see how often this is happening and do some side-by-side comparisons of insurers,” Schilling said.

The filings also give consumers easy access to information about how much insurance companies spend on items not related to health care.

Blue Cross Blue Shield and MVP, combined, insured more than 150,000 individual members and employees in the Green Mountain State last year. Blue Cross insured 132,963 Vermonters and MVP insured 28,329.


In 2012, MVP denied 15.5 percent, or 89,841, of the 579,502 claims it received. That is more than twice the percentage of claims denied by Blue Cross, which rejected 194,496, or 7.6 percent, of its customers’ 2,572,729 claims.

Of those denials, the ones “that directly impact member cost sharing,” the filing says, are called “member impact claim denials.”

“It mostly has to do with the level of coverage,” Schilling said about these denials. “It’s mostly (an insurance company) saying these services aren’t covered or you didn’t go through the proper procedures to get this coverage.”

MVP’s member impact denial rate was about five times that of Blue Cross. Of MVP’s claims, 3.97 percent, or 20,704, were member impact denied. Meanwhile, 0.8 percent, or 20,211, of Blue Cross’ claims were member impact denied.

MVP also paid out more than twice as much for its CEO in 2012. MVP paid $1,250,000 for the CEO position, which Denise Gonick took over from David Oliker in December. Of that amount, $704,000 went to MVP’s CEO salary, $241,324 went to CEO bonuses and $305,176 went to the CEO in “other compensation.”

Blue Cross CEO Don George, by comparison, earned a total $587,184 last year — $574,913 went to George’s salary and $12,271 was paid to George in bonuses.

While George runs Blue Cross Vermont, Gonick oversees MVP’s insurance coverage for roughly 650,000 members in New York, New Hampshire and Vermont.

The cumulative salaries of Blue Cross board members, however, equate to $246,623. MVP reported that it didn’t pay a penny for board member salaries in 2012.

When it came to marketing, MVP spent $516,358 in Vermont and Blue Cross doled out $743,968. That means MVP members spent, on average, $18.23 on their insurance company’s marketing, while Blue Cross members spent $5.60.

Per member lobbying expenses were essentially even at about $1.95. MVP spent $55,366 on lobbying, while Blue Cross spent $258,347.

Neither company reported political donations, but they did shell out for trade organizations.

MVP spent a combined $120,997 to join America’s Health Insurance Plans (AHIP), the Vermont Business Roundtable, Vermont Businesses for Social Responsibility, and the Lake Champlain Regional Chamber of Commerce. About $120,500 of MVP’s dues went to AHIP.

Blue Cross, on the other hand, paid out $55,919 in dues to the Blue Cross Blue Shield Association and did not report paying for membership in any other organizations.

While MVP didn’t report any legal expenses related to claims denials or charitable donations, Blue Cross reported $164,869 in legal fees and $46,245 in donations.

Susan Gretkowski, who lobbies for MVP in the Vermont Statehouse, said her company did not oppose Act 150 when it moved through the Legisltuare last year.

“We feel transparency is important,” she said. “This information has been filed for a long time with (the Vermont government), and now it’s more accessible.”