Press Release

April 19, 2012

Contact: David Neustadt 212-709-1691


Health Insurer Also Cited for Failing to Explain Appeal Rights

Benjamin M. Lawsky, Superintendent of Financial Services, today announced that the Department of Financial Services has fined Excellus Health Plan Inc. $995,000 for improperly denying 166 emergency room claims and for failing to explain coverage to consumers in 337,689 instances.

“Ensuring that consumers are able to obtain the health insurance coverage they are entitled to receive, especially in emergency situations, is essential. Consumers need to understand what their insurance covers, what it doesn’t cover and how they can challenge an insurer when a claim is denied,” Superintendent Lawsky said.

Excellus, a non-profit health insurer based in Rochester, has advised the Department that consumers have been reimbursed for the improperly denied emergency room claims, which occurred between 2003 and 2007.

The Department discovered the violations during a market conduct examination of the insurer’s records covering the four year period. The emergency services denials occurred because of a systems error when claims were processed by the insurer after patients received treatment.

The violations for failing to explain coverage occurred because Excellus didn’t provide consumers with explanation of benefits statements (EOBs) when the insurer processed 337,689 claims for pharmaceutical drug coverage. All but a few of those claims were covered, but the insurer neglected to provide consumers with the EOB notices.

“Under New York law, insurers must explain what is covered by their insurance and how consumers can file an appeal to challenge an insurer when they believe a claim has been improperly denied. The EOB notice must contain that information and must be sent to consumers every time a claim is processed,” Superintendent Lawsky said.

“While this fine reflects the serious nature of these violations, I am encouraged by Excellus’s commitment to take corrective actions. The insurer worked with the Department to resolve this issue and has committed to improving its performance going forward.”

The stipulation signed by Excellus in agreeing to correct the violations can be found at this location on the Department’s website,