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Insurer Improperly Denied Infertility Treatment Coverage for Women in Buffalo, Albany and Central New York

The single complaint of an Ithaca woman denied insurance coverage for infertility treatments has led to a more than $1 million fine against HealthNow New York Inc. and an agreement by the insurer to reprocess and pay similar claims for as many as 2,500 women.

Superintendent Eric Dinallo announced the actions, part of a stipulation signed by the Buffalo-based insurer. The agreement follows an investigation undertaken by the Insurance Department after it received the complaint from the Ithaca woman who challenged the denial of her benefits. The investigation found that claims from other women had also been improperly denied.

“Infertility can be a very difficult experience. Women should not have the added burden of fighting for health benefits they are entitled to receive. State law requires that group insurance policies cover infertility treatment with the exception of certain procedures, such as in vitro fertilization, which are specifically excluded. Insurance companies are not permitted to create blanket exclusions,” Superintendent Dinallo said.

“It took a lot of courage for one woman to come forward with her experience, but now others will benefit from her strength,” Dinallo continued. “HealthNow has been directed to develop a plan to correct the violations and present it to the Department in 90 days. The Department will be examining the insurer later this year to verify that corrections have been made.”

“After the long and contentious struggle for mandated coverage for fertility treatments, it is gratifying to see that insurance companies will be held accountable for failing to honor their legal obligation. It’s encouraging to know that Superintendent Dinallo will help people get the financial help to which they’re legally entitled,” said Anne Adams, Director, Programming and Policy for the American Fertility Association, a national organization that focuses on fertility issues.

In signing the stipulation, HealthNow admitted improperly denying insurance coverage for women seeking infertility treatment, as well as other violations. The total fine includes $600,000 for the infertility coverage violations, plus $450,000 for other violations, including giving members only 15 days notice of rate increases, instead of the 30-day notice required by law.

The portion of the fine for infertility coverage violations is the result of a Department examination of the insurer, prompted by the Ithaca woman’s complaint over a $154 claim denied in 2004. The woman had sought payment for an intrauterine insemination treatment. The insurer told her the treatment was not covered by her insurance policy.

HealthNow reversed its denial after the Department advised the company that the treatment was not specifically excluded under state law. Therefore, the insurer was required to provide coverage.

The Department became aware of other improper denials for infertility treatment coverage as it looked into the woman’s complaint. In the subsequent examination of the insurer’s records, the Department discovered that the insurer had systematically denied benefits to women in the Buffalo, Albany and Central New York areas.

Most of the improper denials involved claims of approximately $150. Under its agreement with the Department, HealthNow must reimburse affected individuals the cost of the improperly denied claims plus interest.

The Department’s examination also found that the insurer failed to provide adequate notice of rate increases to individual members. Under the “file and use” provisions of the Insurance Law, insurers may increase premium rates without the prior approval of the Superintendent of Insurance, but must give members a full 30 days advance notice. HealthNow gave members only 15 days notice in more than 1,100 cases in 2005.

Superintendent Dinallo has urged the Legislature to amend the Insurance Law to give the Department oversight of proposed rate increases before they are put in place, instead of afterward. The current “file and use” law permits insurance companies to move ahead with increases without prior input or approval from the Department.

Other violations included failing to pay claims within 45 days of receipt, failing to deny or request additional information from claimants within 30 days of the receipt of claims, and inconsistent financial reporting.

Department personnel who worked on the HealthNow examination and development of the stipulation included Deputy Bureau Chief Lou Felice and Supervising Insurance Examiner Robert McLaughlin of the Health Bureau; Senior Examiner Pappy Kunjukunju and Examiner Mohammad Huda of the Consumer Services Bureau; and Assistant Deputy Superintendent and Counsel Jon G. Rothblatt and Associate Attorney Beth Cohen of the Office of General Counsel.

The stipulation signed by HealthNow is available on the Department’s website,


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