New York: Contracts Got Appeal Rules Wrong

By Allison Bell

June 16, 2010 at 08:00 PM

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A health insurer in New York state gave policyholders incorrect information about appeal rights for "many years," officials say.

The New York State Insurance Department says in a report on examinations of several units of Aetna Inc., Hartford (NYSE:AET), for the period covering 2001 to 2005, that one unit, Aetna Health Inc., had trouble getting explanation-of-benefits (EOB) forms out to members.

In 2005, Aetna Health violated New York EOB rules 354,999 times, officials say.

Some of the EOB that forms that did go out were incomplete or inaccurate, officials say.

For years, two Aetna units used a contract form that told members "they were not permitted to issue complaints to the [New York] department until all internal appeals had been settled," officials say. "The same contract advised members that the department had no jurisdiction over complaints until all internal appeals had been settled."

Aetna notes that the exam covered a period that ended in 2005.

"The majority of the findings have already been corrected," a company representative says.

In November 2006, the New York department approved a contract revision that made it clear that plan members could contact the New York department before exhausting the company's internal appeals process, the representative says.

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