Special E-Mail Bulletin
February 2001
Record HMO Fine in Georgia
Special E-Mail Bulletin
Hi, everyone.
As I've written to you several times previously, certain state Insurance Commissioners continue to lead by example in their efforts to force healthplans to comply with prompt-payment laws. Top of the list is Georgia's John Oxendine. This story from last week's Savannah Morning News notes that he has slapped Cigna with a $300,000 fine and will require Cigna to get its claims payment house in order.
Here's hoping that more states will take the initiative to ensure that providers are paid promptly and in full for services rendered.
Gil Weber
Insurance company gets record fine from state office
By Tasha Gatlin
Savannah Morning News
Provide a service, get paid for the effort. That's how the business relationship works. The state insurance commissioner's office fined an HMO Monday for not paying for services provided.
Commissioner John Oxendine issued the office's largest-ever fine to CIGNA for violating the state's prompt pay law. The state office fined the company $300,000 and ordered it to revamp its claims payment process.
The law requires physicians to receive payment for services rendered within 15 business days. An 18 percent interest rate is tacked on after the 15-day deadline unless the health care provider contests the claim.
Oxendine didn't have exact figures on the number of unpaid claims or for how long they've been due, but said there are "tens of thousands" statewide. The fine does not include contested claims or those paid late with interest added.
"Basically, CIGNA's handling of claims is the worst I've ever seen," Oxendine said. "I will not allow CIGNA nor any other HMO to violate the law. My message is that doctors and patients should not have to spend their time worrying about an insurance company paying its bills on time."
CIGNA, a health maintenance organization, provides health care to customers across the state. Chatham, Effingham, Bryan and 24 other surrounding counties have residents with CIGNA.
CIGNA officials did not return phone calls for comment.
The Insurance Commission office has been examining the claims data of HMOs and other health care plans for more than a year. Since August 1999, when Oxendine's office informed health care plan providers that his office would examine claims data every quarter, no HMO has been found in total compliance with the law.
Since last year, 17 fines -- totaling more than $1.2 million -- have been imposed on companies for various violations of Georgia insurance law.
One Savannah doctor doesn't think CIGNA is a special problem; in his view, HMOs are an equal-opportunity nuisance.
"They all are a pain," said Dr. Roland Summers, a physician of internal medicine and pulmonary disease. "I can't say CIGNA is harder (to deal with) than any other HMO."
Summers, a former president of the Medical Association of Georgia, said the group's membership got so fed up with being denied payment it brought the concerns to Oxendine's office and that spurred the study.
"It's disappointing that the government has to issue fines because the buyers, the employers, in the end have to foot the bill" because of increased premiums, Summers said.
Business reporter Tasha Gatlin can be reached at 652-0358 or at tgatlin - at - savannahnow - dot - com.
The HMO Study
In 1999, the Georgia Department of Insurance compiled statistics concerning the number of complaints and inquiries received by the department about Health Maintenance Organizations (HMOs) operating in Georgia. The complaints and inquiries were refined and the department determined whether they were "justified," or "unjustified" based on evaluation of the final disposition of the complaint. A complaint is counted against a company only if the company is found to be at fault.
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