System failure behind latest Blue Cross woes

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Massive woes at Blue Cross Blue Shield of North Carolina.

A so-called "system failure" at "Blue Cross Blue Shield of North Carolina enrolled thousands of customers in the wrong health insurance.

A whistleblower is coming forward to the I-team with what they say is proof the insurance giant knew for months about delays and technical issues with the company's new software.
The company says it was and still is confident in this now 2-year-old piece of software.

But one Blue Cross Blue Shield staffer with detailed knowledge says the company knew months ago the software had major flaws, but moved forward anyway with a big expansion, resulting in the system failure that affected thousands of customers.

The I-team obtained these internal memos from Blue Cross Blue Shield.

The source who supplied them, told us: "Major problems arose 2, 3 months ago. Company leadership decided we were moving forward with this software no matter what the problems... It's a catastrophe."

Beginning january 1st, Blue Cross switched nearly 500,000 of its 3 million customers in the state from the company's 15-year old software program called power M-H-S. It's the computer system that manages everything from your health insurance ID card to making sure your doctor's bill gets paid.

Power M-H-S was replaced with a newer software program, called Facets.

The source says Facets was not ready for the burden of a half-million new customers in January. Pointing to the memos from December, highlighting delays in testing the software and billing processing at risk.

The source calling the memos warning signs of a train wreck.

RELATED: BLUE CROSS CUSTOMER SERVICE WOES LEAVE SOME FUMING: "I held for 3 hours and 11 minutes with Blue Cross."

And since Jan. 1, the company's suffered its most serious system failure in decades - 25,000 customers placed into the wrong plan. Many didn't know whether they were still covered. Customer bank accounts were drafted in error.

But Blue Cross says the source is wrong to suggest the memos prove the new software is the cause of the problems.

A spokesman writes: "This is not a brand new system. We are in the second year of a multi-year transition. With any large-scale transition, you will have challenges. That's why we prepared documents such as the one you have - to proactively identify risks and mitigate customer impact through our business contingency planning."

The company refutes the source's claim that it didn't have a back-up plan if Facets didn't work.

"We have consistently looked at ways to mitigate customer impact, and have modified the plan accordingly."

While the I-Team continues to field calls from frustrated Blue Cross customers about their experiences since Jan. 1, the company insists the success rate of this software transition is more than 90 percent.

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