'Flagrant disregard of the law': Nebraska revokes Bright Health's insurance license

Nebraska has fined Bright Health $1 million and revoked its insurance license with the state following a market conduct examination that found the company violated state law more than 21,000 times over a period of two years.

The market conduct examination was conducted by the state in July 2022 and covered a period from January 2020 to February 2022, according to Nov. 3 filings from the Nebraska Department of Insurance. Bright discontinued operations on the Nebraska exchange at the end of 2022. Insurance regulators in Florida and Tennessee have been supervising Bright's finances since late 2022.

To conduct the examination, Nebraska regulators noted they had access only to documents provided by the company, not its internal systems.

Five key findings:

1. Bright Health violated state law across 21,591 incidents.

2. Following a claim-handling analysis, regulators identified an overall error ratio of 45%, "significantly higher than the 7% error threshold which would seem to indicate a conscious and flagrant disregard of the law," they wrote.

3. The company denied coverage for newborn dependents at least 163 times.

4. Bright Health sent 2,245 immunization claims to cost-sharing despite being required by law to fully cover immunizations with no cost-sharing.

5. The total amount of money recovered by the state was $13.3 million, with no evidence of an internal compliance program at Bright Health.

The Nebraska license revocation comes after a period of operational challenges for Bright Health over the last few years. In 2022, the company reported a net loss of $1.4 billion and said it was exiting the ACA market in all states and reducing its Medicare Advantage footprint. In June, Molina said it would acquire Bright's California Medicare Advantage plans for $600 million, the company's last insurance division.

In September, Bright Health said it had entered a repayment agreement with CMS to pay $380 million it owed in risk-adjustment payments for 2022 over 18 months. As of Sept. 30, the company's 2023 net losses total $958 million.

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