New York State
Insurance Department


New York, May 26, 1999

NEW YORK STATE INSURANCE DEPARTMENT TO HMOS AND HEALTH INSURERS: IMPLEMENT BETTER CLAIMS PAYING PROCEDURES
Department Expects More Board Oversight and Comprehensive Claims Manuals

        Superintendent of Insurance Neil D. Levin today charged the board of directors of health insurers and HMOs to fulfill their company’s obligation to consumers and providers by ensuring that all claims are processed fairly and in accordance with all current laws and regulations. To meet this critical obligation, the Department issued a Circular Letter today to all health insurers and managed care companies to provide guidelines for issuing an up-to-date claims handling manual to their employees and to providing the necessary training to ensure the manual’s implementation.

        The letter also states that it is the Department’s position that the companies’ board members obtain certifications from their internal auditor or from an independent certified public accountant that the responsible officers have implemented the necessary procedures. The Board should also obtain a certification from their general counsel stating that the current claims handling procedures are in compliance with all current laws and regulations. Board oversight is also expected of outside entities that process claims on behalf of the company.

        "It is vital that board members of New York’s health insurers take responsibility for the way their company is processing consumer and provider claims. Companies must keep current with all new laws and regulations and provide employees with formal training, and re-training, to ensure that all claims are being handled uniformly," said Levin in the Circular Letter.

        Levin added, "Recent changes in health insurance laws on both a state and national level have imposed significant responsibilities on health insurers, and we expect New York insurers to be in compliance at all times. We will perform frequent targeted market conduct investigations to ensure consumer claims are paid fairly and promptly."

        The Department’s directive to health insurers and HMOs is outlined in Circular Letter #9 (1999), which is available on the Department’s website at www.ins.state.ny.us or by calling (212) 480-2283.


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