Illinois’ largest health insurance company will pay $25 million to settle allegations that it denied coverage to sick children in need of nursing care by “fraudulently” shifting their claims to Illinois’ Medicaid program, state and federal prosecutors said this morning.

The settlement, reached by Illinois Attorney General Lisa Madigan and U.S. Attorney Patrick Fitzgerald, follows several years of complaints from patients and their families. The patients reached out to Madigan’s office after their claims were denied by Blue Cross and Blue Shield of Illinois.

The cost of the medical care, which included so-called private-duty nurses for sick children and other ill patients, should have been covered by Illinois Blue Cross, but instead was shifted to Medicaid at a cost of nearly $12 million, prosecutors said. The claims were denied based on “internal, undisclosed guidelines that were more restrictive than the language provided to patients in plan policy materials,” Madigan’s office said. Get the full story »