- Health insurer Aetna paid a fine of $850,000 to settle charges including incomplete disclosures on "explanation of benefit" forms to consumers, and violations of New York's prompt pay requirements, New York State Insurance Superintendent James Wrynn
"With medical bills so detailed and potentially confusing these days, consumers need an easy way to know how much they have to pay and why," Wrynn said. "That information should be clearly stated on the explanation of benefit form. The form should also tell consumers how to appeal if they think they are being asked to pay an incorrect amount and how to appeal the insurer's decision not to provide coverage if it has been denied. This significant fine shows we will make sure consumers have the tools they need to make the decisions they have to."
Aetna's Violations Included:
• Failing to issue explanation of benefit forms in certain required instances.
• Issuing explanation of benefit forms that failed to identify the service for which the claim was made.
• Issuing explanation of benefit forms that failed to contain a specific explanation for not providing full reimbursement for the amount claimed.
• Issuing explanation of benefit forms that failed to contain the information regarding the claimant's right to appeal a denial of benefits.
The Insurance Department also found that Aetna violated New York's "Prompt Pay Law" by failing to adjudicate certain health care claims within 45 days of receipt; failing to deny certain health care claims or request additional information about such claims within 30 days of receipt of the claim; and failing to pay interest or incorrectly paying interest on certain claims that were paid after 45 days of receipt, as required by statute.
Additional findings uncovered by the Insurance Department included Aetna's failure to fully comply with the requirements regarding disclosure of information to be disseminated to insureds and prospective insureds and certain utilization review requirements. In addition, Aetna failed to provide certain appeal rights mandated by New York Insurance Law to members located outside of New York State.
"While the monetary penalty is reflective of the serious and systemic nature of Aetna's practices, I am encouraged by the company's level of commitment in addressing the Department's findings and working to improve its performance going forward," said Wrynn.
Aetna is to take all steps necessary to prevent the recurrence of similar violations. Specifically, Aetna agreed to revise its procedures regarding the issuance of explanation of benefit forms and their content, its appeal requirements and the information provided to insureds and prospective insureds. Further, it agreed to review its claims adjudication procedures and develop and submit a plan for improving compliance with the Prompt Pay Law.
The Aetna companies included in the settlement were Aetna Health Inc., a health maintenance organization, Aetna Health Insurance Company of New York, an affiliated accident and health insurer and Aetna Life Insurance Company, an affiliated Connecticut domestic life and accident and health insurer licensed in New York.
This settlement resulted from a joint effort of the Insurance Department's Health Bureau and Office of General Counsel.