New York State
Insurance Department

ISSUED: 10/18/2000


Companies Paid Fines Totaling $575,000

            Superintendent of Insurance Neil D. Levin today announced that the Department has once again levied fines against 21 health insurers and HMOs totaling $575,000 for violations of the state’s Prompt Pay Law.

            The fines paid in this, the fifth round of the prompt pay fines, exceed the total fines paid in all of the previous four rounds. This is in keeping with the warning given by Superintendent Levin to the industry earlier this year. In an earlier press release and Circular Letter number 6, both issued on January 27, 2000, Superintendent Levin advised that the Insurance Department would be intensifying its investigation of prompt pay violations and seeking tougher penalties for the insurers and HMOs that have repeatedly violated the statute.

            "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 claims promptly will result in disciplinary action," 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 within 45 days of receipt. Too often, consumers and health care providers experience unnecessary delays on their claims.

            The current fines by company are:

HMO/Insurer Amount of Fine
CIGNA Healthcare of NY, Inc $ 15,000.00
Connecticut General Life Ins. Co. $ 1,700.00
Empire BC BS of Grtr NY $ 16,000.00
Excellus Health Plan, Inc. $ 2,750.00
Group Health, Inc. (GHI) $ 29,850.00
The Guardian Life Ins. Co. of America $ 1,200.00
Healthcare Plan, Inc. (Univera) $ 2,750.00
Healthfirst $ 1,000.00
Healthnow New York, Inc. $ 28,500.00
Healthsource of New York/New Jersey $ 1,000.00
Health Insurance Plan of Grtr New York (HIP) $ 37,000.00
Independent Health Association, Inc $ 6,500.00
MDNY Healthcare, Inc. $ 5,000.00
Metropolitan Life Insurance Co. $ 18,000.00
NYLCare Health Plans of New York $ 12,750.00
Oxford $215,000.00
Physicians Health Services of New York, Inc. $ 5,500.00
Prudential Healthcare Plan of New York, Inc. $ 18,000.00
United Healthcare of New York, Inc. $ 7,000.00
U.S. Healthcare, Inc. $116,000.00
Vytra Health Services, Inc. $ 34,500.00
Total $575,000.00

            The companies listed above have paid 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.

            "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."

            In addition to paying the fines, law also requires that HMOs and insurance companies pay interest on late claims at the greater of 12 percent per year, or the corporate tax rate as set by the Commissioner of Taxation and Finance. The stipulation also mandates that all claims requiring the payment of interest be reported to the Department.

            The Department has received over 67,500 prompt pay complaints since the law went into effect in January 1998. Consumers who have a prompt payment complaint can call the Department’s toll-free hotline at 1-800-358-9260.

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