New York State
Insurance Department

14 Insurers To Pay $115,800; More Than Half Are Second Time Offenders

New York, April 7, 1999

Superintendent of Insurance Neil D. Levin today announced that the Department has, for the second time this year, levied fines against health insurers and HMOs for violating the state’s Prompt Pay Law. The 14 companies have failed to pay claims in a timely manner – resulting in a total of $115,800 in fines. These violations are in addition to the first round of fines that the Department announced in January, which totaled $72,200.

"We are putting all health insurers on notice that they must pay patients and providers on a timely basis," said Levin. "We will closely monitor industry compliance with the Prompt Pay Law and continue to impose penalties on those companies that fail to comply."

The Prompt Pay Law requires HMOs and insurers to pay undisputed health insurance claims within 45 days of receipt – ensuring the prompt, fair and equitable payment of patient and provider claims. Too often, consumers and health care providers experience unnecessary delays in receiving payment on health insurance claims. However, the law does include 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

Aetna /U.S. Healthcare
Empire Blue Cross Blue Shield
Prudential Healthcare
Capital District Physicians Health Plan
Health Now




The companies have been fined $100 per violation and have each generated at least 10 upheld complaints for late payments from October 1, 1998 through February 1, 1999. By agreeing to pay the fines imposed by the Department, the companies are acknowledging that they failed to pay claims promptly and agree to put corrective measures in place to avoid future violations.

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

Levin noted that the Department handled over 28,000 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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