NU Online News Service, Sept. 7, 11:03 a.m. – Maryland Insurance Commissioner Steven B. Larsen has imposed $1.4 million in administrative penalties on five health plans.
The penalties were the result of investigations into the plans’ claims payment practices, the commissioner’s office says. Fines ranged from $25,000 to $600,000 for failing to pay claims within 30 days and other infractions, such as failure to properly monitor the activities of administrative service providers.
All plans affected have cooperated and will take corrective action, the commissioner says.
Insurers often emphasize that they agree to pay fines to avoid the cost and inconvenience of drawn-out regulatory disputes. The fact that an insurer has agreed to pay a fine is not necessarily a sign that it has violated any laws or regulations. Insurers have also questioned whether strict “prompt-payment” time limits give them enough time to investigate problem claims or cope with vacations, computer breakdowns and other routine business problems.
The five companies cited by the Maryland regulators are Aetna U.S. HealthCare Inc., Blue Bell, Pa., fined a total of $850,000 for two alleged infractions; Magellan Behavioral Health Inc., Columbia, Md., $150,000; Dental Benefit Providers of Maryland Inc., Bethesda, Md., $75,000; CIGNA Dental Health of Maryland, Baltimore, $25,000; and United Healthcare of the Mid-Atlantic, Baltimore, $300,000.
A spokesman for Aetna said his company takes the findings seriously. “We’re committed to obeying Maryland’s laws and regulations,” the spokesman said, adding that Aetna will take any steps necessary to improve its systems.
A spokeswoman for CIGNA noted that the fine imposed on her company had to do with administration of utilization management services, rather than a payment delay.
A spokeswoman for Magellan says her company was fined because of problems with records and information from 2000.
Magellan itself brought the problems to the attention of Maryland regulators and believes it has made great progress at solving the problems, the spokeswoman says.
Representatives for UnitedHealth and Dental Benefit declined to comment.