New York State
Insurance Department


DEPARTMENT FINES INSURERS FOR VIOLATING PROMPT PAY LAW
11 Companies To Pay $66,100

July 21, 1999

Superintendent of Insurance Neil D. Levin today announced that the Department has once again levied fines against health insurers and HMOs for violating the state’s Prompt Pay Law. The 11 insurers that have failed to pay their claims on time have been fined a total of $66,100 as part of the third round of fines. So far this year, the Department has imposed fines totaling $181,900.

"Consumers and providers must be paid in a timely manner or health insurers will face increasing penalties," Levin said.

The Prompt Pay Law requires all health insurers to pay undisputed health insurance claims within 45 days of receipt, ensuring the prompt, fair and equitable payment of patient and provider claims. The law includes safeguards against fraud by making exceptions for claims that insurers believe are fraudulent and in cases where the payment obligation on the claim is not immediately clear.

The current fines by company are:

HMO/Insurer   Amount of Fine
Capital District Physicians Health Plan
Cigna
Excellus
GHI
Health Services Med Corp
HIP
MDNY
Metropolitan Life
Oxford
United Healthcare
U.S. Healthcare (Aetna)
$1,100
  1,200
  1,600
  3,200
  7,300
  1,400
  2,600
  8,600
30,200
  1,700
  7,200

The companies listed above have agreed to pay the fines imposed by the Department. They also acknowledge that they failed to pay claims promptly and agree to put corrective measures in place to avoid future violations. Vytra has refused the Department’s offer of a stipulation and fine and has requested the first administrative hearing on the Department’s Prompt Pay violations.

In addition to paying the fines, the companies are required by law to pay interest on the late claims. Under the law, the interest must be paid at the greater of 12 percent per year, or the corporate tax rate that is set by the Commissioner of Taxation and Finance.

The Department has handled over 38,400 prompt pay complaints since the law went into effect in January 1998. Overall, the Consumer Services Bureau handled more than 60,000 complaints last year from both consumers and providers on various insurance issues. Consumers who have a prompt payment complaint can call the Department’s toll-free hotline at 1-800-358-9260.


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