HealthNow New York Inc. has been fined a civil penalty in lieu of a disciplinary action of $700,000 by the New York State Department of Financial Services (DFS) for failing to explain coverage and benefit rights to certain health plan members and for failing to tell members how to appeal claims denials.
HealthNow, a Buffalo-based not-for-profit health insurer, was cited for approximately 164,000 instances of failing to provide explanation of benefits statements that contained all the necessary wording, according to the DFS.
The statements, required under state law, are intended to describe what services the plans cover and how consumers can appeal when they believe claims are improperly denied.
In addition, the company was cited for failing to:
- File certificates of appointment for its agents;
- Timely notices of appointment of agents;
- Notify the insurance department of the company’s termination of agents; and
- Ensure that commissions were paid only to licensed insurance agents and producers.
HealthNow failed to provide to its members written acknowledgement of grievances within 15 business days, as required by law, the DFS stated.
HealthNow waived its right to further notice and hearing in this matter and admitted the violations. It also agreed to take steps necessary to prevent the violations from occurring again. The company agreed to revise procedures regarding issuing explanation of benefits statements and making mandated filings regarding its producers.
The violations occurred during the period Jan. 1, 2004, through Dec. 31, 2008, according to the stipulation and were turned up during an examination covering that five-year period. The stipulation can be found on the Department’s website.
“Consumers have a right to know what their health plans cover, what the plans don’t cover, and what they can do when their claims have been denied improperly,” Insurance (and Banking) Superintendent Benjamin Lawsky said. “This fine reflects the serious and systematic nature of the practices uncovered by the department. We are however, encouraged by HealthNow’s commitment to addressing the department’s findings and improving its performance going forward.” Lawsky signed the stipulation on Dec. 12, 2012.
Lawsky takes these lapses seriously.
In October, Oxford Health was fined $665,000 for failing to explain coverage to their health plan members. Oxford also failed to tell members how to challenge claims denials.
Oxford was cited for approximately 300,000 instances of failing to provide explanation of benefits statements. The two Oxford companies fined were Oxford Health Plans NY Inc. and Oxford Health Insurance Inc. Oxford Health is owned by UnitedHealth Group.
Oxford's period of violations was also based on an exam from the previous decade conducted by the then-New York State Insurance Department for the period Oct. 1, 2001, through Dec. 31, 2008.