Special E-Mail Bulletin
May 2000
More on fines for late claims payment
Special E-Mail Bulletin
Hi, gang.
As part of my continuing effort to keep you posted on the latest national news regarding late claims payments and what some states are doing about it, here's a story that appears in today's Atlanta Journal Constitution. Once again Georgia's Insurance Commissioner shows he's not going to let HMOs wriggle out from under the tough prompt payment laws in place in that state. This time Prudential (now owned by Aetna/USHealthcare) was caught and slapped with a hefty fine.
Note particularly the Commissioner's comments about how Georgia is the only state that electronically monitors all claims data, thereby allowing for prompt analysis and action as necessary.
More news to follow as I receive it.
Gil Weber
Hospitals, doctors, to recoup payments under new law
BUSINESS TUESDAY • May 2, 2000
Prudential HMO fined by state
Andy Miller - Staff
Tuesday, May 2, 2000
Prudential HealthCare has become the latest HMO to draw a hefty fine from Insurance Commissioner John Oxendine for not paying claims promptly.
It is the eighth such fine the Insurance Deparment has levied since February.
Oxendine has ordered Prudential to pay a penalty of $199,894.90 for violating the state's prompt-payment rule. The law requires health insurers to pay a "clean" or uncontested claim to a doctor or hospital within 15 working days of receiving it. Or they must mail a notice stating why the claim hasn't been paid.
Oxendine said Monday that the state's Insurance Department is the only one in the nation that electronically reviews all claims data.
"Now, by reviewing every claim, every quarter, an HMO not paying on time is going to get caught," Oxendine said. "There's nowhere to hide."
Prudential also is one of four insurers being sued by the Medical Association of Georgia, which accuses them of routinely delaying payments of claims.
Prudential's health care operations were acquired last August by Aetna Inc., but the two Georgia plans currently maintain separate operations.
"We are working diligently to correct any prior claim payment practices that may have contributed to the allegations by the Georgia Insurance Department," Prudential spokesman Robert Kremer said.
The fine arose from an Insurance Department audit of payments during the quarter ending Sept. 30. Kremer said Prudential, during that period, processed 95 percent of medical claims within the 15-day limit.
Kremer would not comment on the Georgia payment law. But the Georgia Association of HMOs has complained that the 15-day rule is the strictest in the country.
"The continued efforts to comply with these stringent standards are driving up our costs," said Gay Ann Williams, the HMO group's executive director.
That, in turn, will raise the cost of insurance premiums for employers, she added.
The HMO association has held talks with MAG and GHA, an association of Georgia hospitals, to identify where claims problems occur, Williams said.
Doctors and hospitals also bear some responsibility for the problems, Williams said.
One area she cited was medical offices not posting payments immediately when they arrive.
Still, Oxendine said insurers are beginning to improve their payment records as a result of the agency crackdown.
Separately, the department said it recently reduced a fine against Coventry Health Care from $262,700.20 to $201,570.50 after the company submitted new claims data.
RECENT FINES FOR SLOW PAYMENT OF CLAIMS
| Company | Amount |
| United Healthcare of Georgia *Fine also covered other violations. | *$123,500 |
| Coventry Health Care of Georgia | $201,570.50 |
| Aetna U.S. Healthcare | $61,305 |
| UnitedHealthcare of Georgia | $52,729 |
| Humana Employers Health Plan of Georgia | $15,039 |
| HMO Georgia (Blue Cross and Blue Shield of Georgia) | $1,798 |
| Blue Cross and Blue Shield of Georgia health plan | $2,355 |
| Prudential HealthCare of Georgia | $199,894.90 |
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