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Revisiting Those Puzzling EOBs: New York Penalizes Aetna

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Surfing the website of the New York Insurance Department, I came across a press release, the substance of which I had not seen reported by the New York news media.  The state's insurance regulator had just fined giant health insurer Aetna $850,000 for failing to identify for policyholders on their Explanation of Benefits (EOB) statements the exact services for which a claim was being made.  The company had also failed to specify why it was not giving full reimbursement for an amount that the policyholders had claimed.  Why, I had just written about this very subject in August.  Insurance Superintendent James Wrynn said the penalty 'was reflective of the serious and systemic nature of Aetna's practices.

In a previous post I pointed out that Aetna's EOBs were confusing and opaque.  They did not describe what service was performed.  Instead, they labeled procedures simply as an 'office visit', 'X-ray or lab services,' or 'medical services,' leaving the patient/consumer to figure out what was actually done at the office visit and what was included in the bundled up term 'medical services.'  Nor, as I pointed out, did Aetna adequately explain why a deductible applied to a lab test and not a physical exam.  Did the employer's plan make a distinction, or was the insurer playing games? How was someone to know?

New York regulators apparently wanted to know, too, and unknown to me at the time, had already launched an investigation into the company's billing practices.  They found a lot more than just undecipherable EOBs.  The Insurance Department said the fine also resulted from violations of the state's prompt pay requirements.  Companies must pay claims within 45 days of receiving them, or if concerns exist, they must deny them or request more information within 30 days.  The department said that Aetna had failed to pay interest or had incorrectly paid interest on claims that were paid after the 45 days.  The company also failed to tell its customers outside of New York that New York law gives them appeal rights.

I had thought that the carrier would be on good behavior on that one since the Obama Administration had made such a big, public deal about consumer protections in the new health law, including the right to appeal denied claims.

My skepticism meter dialed up when I discovered another press release issued by New York regulators. It said Aetna had failed to give policyholders under the Healthy NY program proper written notice of premium increases or conversion rights available to workers whose coverage was terminated.  Healthy NY is a state-subsidized program that helps small business owners provide employees and their families with affordable coverage.  Earlier this year, the Department slapped Aetna with a $750,000 fine for these violations.

It sure seems as if transparency and disclosure have not been at the top of Aetna's priorities.  Such fines may be little more than a slap on the wrist to a carrier with zillions of dollars in revenues, but they do indicate that the carrier has not exactly been customer friendly.

Last week the National Committee for Quality Assurance, an outfit that accredits a variety of health care organizations, released its new health plan rankings.  Aetna's 20 plans were not highly ranked, with Aetna New York coming in at number 110. For the most part, the plans did not score well on consumer satisfaction.  It's a good bet that some of that dissatisfaction involves the shortcomings noted by the New York Department of Insurance.

If you have a choice of health plans this fall, putting all this information together might make a lot of sense before committing your family to a company that has been in Dutch with state regulators.  I'd suggest that you look at the websites of your state insurance department to find out if other carriers you might be considering have any strikes against them. That's transparency you can believe in.

More Blog Posts by Trudy Lieberman

author bio

Trudy Lieberman, a journalist for more than 40 years, is an adjunct associate professor of public health at Hunter College in New York City. She had a long career at Consumer Reports specializing in insurance, health care, health care financing and long-term care. She is a longtime contributor to the Columbia Journalism Review and blogs for its website, CJR.org, about media coverage of health care, Social Security and retirement. As a William Ziff Fellow at the Center for Advancing Health, she contributes regularly to the Prepared Patient Blog. Follow her on twitter @Trudy_Lieberman.


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