New York State
Insurance Department

Companies Agree to Pay Fines Totaling $72,200

New York, January 11, 1999

Superintendent of Insurance Neil D. Levin today announced that for the first time, the Department has levied fines against 12 health insurers and HMOs totaling $72,200 for violations of the state’s Prompt Pay Law. The 12 companies have failed to pay undisputed claims and bills within 45 days.

"We are sending out the message loud and clear to insurers and HMOs in New York State and putting them on notice that failing to pay bills promptly will result in enforcement action and fines," said Levin. "Patients and health care providers deserve to be paid in a timely fashion and we will use all of our enforcement tools to ensure that insurers and HMOs fulfill this basic obligation to their customers."

The Prompt Pay Law, signed by Governor Pataki in September 1997, requires HMOs and insurers to pay undisputed claims and bills within 45 days of receipt – ensuring the prompt, fair and equitable payment of patient and provider claims and bills. Too often, consumers and health care providers experience unnecessary delays on their claims. However, the law does not include claims that may be fraudulent or where the payment obligation on the claim is not clear.

The Department has levied fines -- $100 per violation -- against the following companies that have generated at least 10 upheld complaints for failing to comply with the law during the period from April 1st to September 30, 1998.

Aetna U.S. Healthcare
Capital District Physicians Health Plan
Community Health Plan
HUM Healthcare Systems
NYL Care
United Healthcare
Amount of Fine
$ 8,700
$ 4,200
$ 2,900
$ 2,700
$ 2,600
$ 2,400
$ 2,000
$ 2,000
$ 1,800
$ 1,000
$ 1,000

By agreeing to pay the fines and signed stipulations, the companies have all acknowledged that they failed to pay claims promptly and agree to put corrective measures in place to avoid future violations.

"The Department will continue to closely monitor the claims performance of New York’s insurance industry," said Levin. "The industry can expect the frequency and level of fines to increase until all companies are in compliance with the law."

The Prompt Pay Law is just one of the many reforms enacted by Governor Pataki to overhaul health care in New York State. Recent landmark legislation includes the Managed Care Reform Act of 1996, the Women’s Health and Cancer Rights Act of 1997, the Child Health Plus expansion, and a law protecting consumers’ rights to an external appeal of medical necessity decisions made by HMOs and insurers.

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