An Albany-based health insurer with coverage in this region has been fined $600,000 for numerous violations of state insurance regulations.
Capital District Physicians Health Plan, CDPHP, and CDPHP-Universal Benefits Inc., an affiliated health insurer, were penalized primarily because they failed to advise consumers how to appeal when their claims were denied, Insurance Superintendent Eric Dinallo said Tuesday.
CDPHP and UBI to contact all members who were denied claims in situations where the companies failed to provide Explanation of Benefits notices or provided inadequate EOB information, Dinallo said.
The companies have agreed to contact members who filed claims for health care services to make sure they received proper denial notices. The settlement includes 121,911 claims submitted between 2004 and 2006.
An EOB spells out how a claim has been processed, what costs are covered by the insurer, what costs must be paid by the member, and what steps a consumer can take to appeal the denial of a claim, Dinallo said.
CDPHP members who receive reissued EOBs will be able to appeal previously denied claims if they have not already done so. CDPHP will be responsible for paying interest to members if additional payments are made in connection with these claims.
The deficiencies in the EOBs were uncovered in an examination of the insurer's practices covering a period from 2001 through the first quarter of 2006. The department said the deficiencies were specifically related to the insurer's EOBs and notice of appeal rights and not with the company's appeals process procedures.
The department has directed CDPHP to review its procedures and submit a plan within 90 days for improving its compliance.
The insurer was also found to have sent rate increase notices to consumers containing inaccurate information and falsely suggesting the state department had approved the increases. Under law, health plans such as CDPHP are permitted to increase rates without approval, though the department has urged the Legislature to restore its ability to approve or disapprove such increases before they are implemented.
Other violations by the insurer included:
ä Failing to use a licensed claims adjuster to negotiate out-of-network provider claims
ä Instances of failing to adjudicate claims in a timely manner
ä Instances of claims adjudication errors.
Consumers may call the department's Consumer Services Bureau toll-free at (800) 342-3736.
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