Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, July 20, 1994                   TAG: 9407200113
SECTION: VIRGINIA                    PAGE: C-1   EDITION: METRO 
SOURCE: Associated Press
DATELINE: RICHMOND                                LENGTH: Medium

TRIGON'S PRACTICES PROBED

Trigon, known until recently as Blue Cross/Blue Shield of Virginia, ``knowingly obscured benefits, coverages or provisions of its contract ... with such frequency as to indicate a general business practice,'' Gilmore's report said.

The Washington Post obtained a copy of the report and used it as the basis for a story in today's editions.

The report said Trigon handled about 1.1 million claims from July 1991 to January 1994 and that ``in most instances ... paid less than the amounts represented'' on its statements to policyholders.

Scrutiny of 135,000 of those claims turned up about 2,700 violations of state laws, according to the report.

The report said that because each violation could result in a fine of up to $5,000, Trigon could be exposed to ``potentially staggering monetary penalties.''

But imposition of all the penalties, it noted, ``would be unduly harsh, probably bankrupt the company ... and likely disrupt the provision of health care services'' in the state ``to the detriment of consumers and the public interest.''

Trigon spokesman Jim Goss said the company has not been contacted by either Gilmore's office or Insurance Commissioner Steven T. Foster and that it would be premature to respond.

Both Gilmore and Foster launched investigations last winter after the Richmond Times-Dispatch said policyholders seldom benefit from the discounted charges that Blue Cross negotiates with hospitals because it provides such a large volume of patients.

Blue Cross responded by agreeing to begin basing co-payments on the discounted fees it negotiates with health care providers.

Early this year, the General Assembly passed a law, which went into effect July 1, that requires insurance companies to include such savings in their policies.

Although that provision was not in effect at the time of the alleged violations, the insurance commission ``could find that it was unfair market conduct because the practices were not disclosed to policyholders,'' spokesman Ken Schrad said.