Issue:  2007-03-09

Two HMOs Fined for Prompt Pay Violations

♦ New Jersey

TRENTON, N.J., March 9 – Two HMOs, Aetna U.S. Healthcare, and University Health Plans, have been fined for violating the states prompt payment of claims regulations under consent agreements divulged in the 2006 winter newsletter of the state Department of Insurance.

Claims must be paid within 30 or 40 days: electronic submitted claims within 30 days and non electronic 40 days of receipt.

University Health Plans Inc. of Newark was fined $403,000. Of that total, $70,000 covered sanctions, and $333,000 was paid as a disgorgement of an agreed-upon percentage of total claims, instead of interest payments to the affected providers.

Further details were unavailable in the consent order.

The department order noted that University, in consenting to the sanctions, admitted no wrongdoing. The order said University is now taking effective measures to correct late payments.

University Health has 58,000 enrollees, specializing in providing health care to those enrolled in the New Jersey Medicaid and N.J. Family Care programs.

Aetna Health, based in Blue Bell, Pa., was fined $200,000. It has 544,000 New Jersey customers. The department order noted that Aetna has complied with all of the recommendations of the examiners and instituted changes regarding prompt payments.

The order reported that Aetna, without admitting any violation or wrongdoing, waived a hearing and consented to the fine.

The market conduct examinations of both HMOs covered April 2000 through March 2002.

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