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Governor Pataki Announces Major Investigation into the Claims Paying Practices of HMOs

New York, May 9, 1997

Governor George E. Pataki today announced that he has directed Acting Superintendent of Insurance Neil D. Levin to launch a major investigation into the claims paying practices of health maintenance organizations and other health insurance companies. The Governor also announced that the State Insurance Department will now undertake a detailed review of an HMO's cash management practices and claims settlement procedures as part of its regular financial examinations of these health insurers.

"We have received numerous complaints from consumers, doctors, hospital officials and other health care providers informing us they have to wait many months before being reimbursed by HMOs," said Governor Pataki. "This is unacceptable. Therefore, I have directed the State Insurance Department to immediately commence a series of market conduct investigations, targeted to review the claims paying practices of HMOs to ensure that reimbursements are made in a timely manner. I will not allow HMOs to unnecessarily delay paying consumers claims, nor will I allow hospitals and doctors to be victimized by these delays."

"These HMOs face tough sanctions if we determine they are deliberately withholding payments," said Acting Superintendent Levin. "Today's announcement should send the message that these practices will not be tolerated."

Specifically, the Insurance Department will:

  • Undertake a series of targeted market conduct investigations designed to closely examine the claims paying practices of HMOs as well as other health insurers, and;
  • Review the management practices of HMOs, especially their cash management practices and claims paying procedures, as a regular component of Department financial examinations.

Consumers and health care providers with complaints concerning delays in payments should contact the State Insurance Department at:

1-800-342-3736 or 212-602-0203

"Passage of an HMO bill of rights last year to protect consumers, as well as doctors and other health care providers, was a major step in keeping New York State in the forefront of assuring a quality health care system for all our residents," said the Governor. "The law ensures that consumers have access to appropriate specialists, that questions of medical necessity are decided by health care professionals, not bureaucrats, and that emergency room treatments are properly covered. The law also eliminated 'gag' clauses and provides physicians with due process rights."

"Protecting the interests of consumers as our health care market evolves is a paramount concern. I have directed the Insurance and Health departments to step up their efforts and continue to aggressively insure that our citizens, as well as health care providers, are fully protected."

Department of Financial Services


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