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Life Health > Health Insurance > Health Insurance

Missouri negotiates $1 million settlement with health insurer

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The Missouri Department of Insurance has negotiated a $1 million settlement with Assurant Health.

Assurant Health, a unit of Assurant Inc., has agreed to: 

  • Provide childhood immunizations for Missouri residents without co-payments, coinsurance, deductibles or waiting periods.
  • Review all denied claims for childhood immunizations, colon cancer screenings, mammograms, Pap smears, prostate screenings and paid claims for short-term major medical submitted to three health insurance subsidiaries since Jan. 1, 2004, and pay the claims that should have already been paid, along with interest.
  • Pay a $500,000 fine to the Missouri State School Fund.
  • Donate $500,000 to a Missouri charitable or nonprofit organization or organizations to be selected by the three Assurant Health subsidiaries and approved by the department.

The settlement resolves a targeted market conduct examination that involved a review of how three Assurant Health units — Time Insurance Co., Union Security Insurance Co. and John Alden Life Insurance Co. — handled underwriting, rating, claims handling practices, and handling of complaints and grievances from Jan. 1, 2004 through Dec. 31, 2006.

The department looked at small-group policies sold to small businesses as well as individual short-term medical policies.

The department found, for example, that the companies interpreted some preventive services coverage rules in a way that conflicted with how the department interpreted the rules.

When the department looked at a sample of Time Insurance claims for Pap smears, for example, it found that the company erred in processing 58 percent of the claims in 2004, 62 percent of the claims in 2005 and 83 percent of the claims in 2006, department officials said.

The company also erred in processing about 40 percent to 50 percent of PSA antigen tests for men during the three years reviewed, officials said.

In some cases, Time denied PSA test claims as involving a pre-existing condition or a special exception rider, even though the service was connected to the excluded conditions, officials said.

In 2004, the company erred about 19 percent of the time when it denied claims based on pre-existing condition exclusions, officials said.

The company denied the claims, even though it did not have documentation verifying that the condition was subject to the pre-existing exclusion, the 12-month pre-existing condition exclusion period had expired, or the insured had prior creditable coverage that required the pre-existing condition exclusion to be waived, officials said.

Julie Hix-Royer, an Assurant Health compliance executive, said the company disagrees about the Missouri department’s interpretation of some rules.

A difference of opinion about how insurers should handle cases in which providers send claims to the wrong address had a big effect on the Missouri department’s claim error counts, Hix-Royer said.

Assurant Health said in a statement that it has fully cooperated with the Missouri department’s exam, and that it remains committed to conducting business in accordance with Missouri’s insurance regulations.

“We look forward to continuing to serve the unique health insurance needs of individuals and small businesses in Missouri,” the company said. 

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