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NYAG Enforces Health Insurance Coverage Issues with Two Enforcement Actions

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New York State Attorney General (NYAG) Eric T. Schneiderman has struck settlements with insurance companies and providers resulting in refunds of $500,000 to patients and an agreement to stop alleged improper billing. Due to the AG’s investigation, Group Health Inc. (GHI) has already returned $162,000 to New York consumers, the AG’s office said.

The agreements are with GHI, part of EmblemHealth, and New York Medical & Diagnostic Center, Inc. (NYMDC), a twenty-provider group in New York City. 

The NYAG’s office Health Care Bureau conducts investigations into health insurance companies and others, as does the state Department of Financial Services (DFS), the state insurance regulator. 

The NYAG’s office encourages people who believe they may have been treated unfairly by a health care provider or health plan to call the AG’s Health Care Helpline.

The NYAG’s office has had a health care bureau and a hotline since 1997.  

The cases were handled by the NYAG’s Health Care Bureau as well as the Executive Deputy Attorney General for Social Justice. The AG’s office can investigate and charge health insurers under a panoply of state statutes outside of insurance law. 

DFS Superintendent Benjamin Lawsky, in his first year as head of the DFS, has made health insurance costs and coverage a cornerstone of his stewardship, using such measures as the state medical loss ratio requirements.

These particular NYAG cases arose after consumers turned to the Health Care Bureau for help. In both cases, the consumers followed the rules of their insurance coverage yet were hit with unexpected doctor bills, most of which should have been covered, the NYAG’s office stated. “Unexpected medical bills are a devastating problem for New Yorkers. Insurance companies and health care providers must be held accountable for violating the law and overcharging patients,” Schneiderman stated. 

“Plans and providers must take care to abide by the terms of their policies and contracts and not exacerbate the already significant financial burdens consumers face in getting the health care they need. At a time when legitimate medical bills are already an extraordinary burden on New Yorkers, improper billing and claims practices are even more deplorable.”

GHI processed claims for certain key medical providers covered in its policy at its standard out-of-network rate which led to patients being billed for covered physician services — sometimes in amounts reaching thousands of dollars — when they should have been shielded from any expense, the NYAG’s office stated.

Its parent company responded in a statement that, “more than a year ago, EmblemHealth recognized and addressed an error that affected a very small percentage of members in our PPO and EPO plans.” 

“As a result, these members received less than full reimbursement for services provided by certain non-participating physicians. This has been corrected. The company has fully cooperated with the New York Attorney General’s office to resolve this fairly and as promptly as possible for our members.”

EmblemHealth also stated it has modified its policies and provided customer service staff with additional training. 

In the case of NYMDC, it was allegedly billing patients the difference between NYMDC’s charge and the payment by the patient’s health plan, despite the fact that NYMDC, as a participating provider with the health plan, was required to accept the plan’s payment as payment in full, the AG’s office charged.  

This practice, known as “balance billing,” is prohibited by New York law and the provider’s contractual obligations.

NYMDC, a small provider located in Kew Gardens, Queens, will now send refunds to affected patients who were improperly billed for services that were covered by their health insurance plans. An email to it was not returned by press-time.

NYMDC also agreed to retain an auditor to ensure all eligible consumers are given refunds and notices will be sent to patients. Further, NYMDC shall ensure that all collection activities cease and patients’ credit standing is restored to good order. In addition to providing reimbursement, the agreement provides that NYMDC reforms its practices, train its employees, and pay a penalty of $7,500, the NYAG’s office stated. 


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