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Former Blue Cross Blue Shield Medical Director Claims he was Sued for Fighting Illegal Insurance Practices

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Blue Cross Blue Shield of North Dakota is facing a claim filed by the company’s former medical director, who alleges the company ignored his concerns about unethical insurance practices.

The whistleblower alleges that pointing out what he described as illegal insurance practices cost him his job. Dr. Kenneth Fischer, former director of behavioral health for Noridian Mutual Insurance Co., which does business as Blue Cross Blue Shield (BCBSND) North Dakota, claims BCBSND’s practices were costing its customers millions of dollars in higher premiums and out-of-pocket costs, according to

Fischer claims the company overpaid providers out of employee accounts and then failed to recover those overpayments. According to the lawsuit, BCBSND had no legal authority to do so, and made no effort to recover the money, reported.

On Friday, the BCBSND board of directors voted out CEO and President Paul von Ebers after announcing $72.9 million in losses in 2013, according to

Of that, $51 million was attributed to subsidiary Noridian Healthcare Solutions, which was financially drained from a contract to build the failed Maryland health care exchange, reported.

Fischer, who was hired in 2011, alleges in the lawsuit that he didn’t fully understand BCBSND’s insurance practices for nearly three years. When he uncovered what he believed to be faulty practices in his behavioral health area, he soon discovered that those practices were “significant and widespread” throughout the company, according to

The pattern, according to the claim, was “later determined to infect the entire book of business of BCBSND,” reported.

According to Fischer’s lawsuit, Fischer informed Jacquelyn Walsh, vice president of clinical excellence and quality, of his concerns in 2012, but she ignored them for several months. Finally, on November 1, Fischer met with Walsh and laid out his concerns in detail, according to

Fischer alleges that he shared five main concerns with Fischer, including that thousands of claims had been wrongly paid that were previously denied by a medical director, as well as reviewers and appeals reviewers in some cases. Fischer also told Walsh that a decade-long culture of “workarounds” had been in place for a decade that skipped behavioral health analyses and claims, reported.

Fischer demanded that Walsh take action, promising to go over her head if she did not, court documents claim. Three weeks later, Fischer went to Senior Vice President Sharon Fletcher, whom Fischer claims assured him that he had done the right thing, but Fletcher complained about him to the human resources department, Fischer later found out, according to

The case was referred to an outside law firm, and Fischer claims he never saw the substance of the allegations against him, and that nothing was done about his concerns. Fischer met with Noridian’s chief compliance officer for nearly four hours on December 10, where he informed the compliance officer that BCBSND was violating the Employee Retirement Income Security Act and the Federal Employees Benefit Health Plan, reported.

From mid-January to mid-February, Fischer was involved in a mandatory market conduct exam with the Insurance Department. Fischer alleges he was fired just days after the exam concluded on February 20, supposedly for failing to attend a February 25 meeting with his management team, according to

Fischer claims in his lawsuit that the company tried to pressure him to resign by listing “unfiled and uninvestigated” charges against him as part of the external human resources investigation, which wrapped up a week before the Insurance Department exam, reported.

According to Fischer, the company destroyed his reputation by defaming him in the industry as retaliation for him coming forward about the company’s unethical practices, wrote.

Fischer is suing for lost wages and emotional distress. The lawsuit seeks unspecified damages. Fischer’s attorney said proving the irregularities laid out in the complaint would not be part of the lawsuit, according to disclaimer: This article: Former Blue Cross Blue Shield Medical Director Claims he was Sued for Fighting Illegal Insurance Practices was posted on Thursday, May 8th, 2014 at 5:58 pm at and is filed under Employment Lawsuits, Other Lawsuits.

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