NYS Fines Buffalo Health Insurer

January 18, 2013 Updated Jan 18, 2013 at 10:06 AM EDT

By WKBW News
By Tracey Drury, Buffalo Business First

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January 18, 2013 Updated Jan 18, 2013 at 10:06 AM EDT

BlueCross BlueShield of WNY parent HealthNow NY Inc. has paid $700,000 in additional fines from the state for notification violations.

The Buffalo-based health insurer was fined by the state Department of Financial Services for failing to explain coverage and benefit rights to health plan members, and for failing to tell members how to appeal claims denials.

The citations cover 164,000 cases during a five-year period from 2004-2008 when the company failed to provide explanations of benefits statements with the necessary wording. According to DFS, the statements, required under state law, are intended to describe what services the plans cover and how consumers can appeal when they believe claims are improperly denied.

HealthNow executives said the company cooperated on the market conduct report completely. The issues identified, and the fine imposed, relate largely to recordkeeping practices the company had in place during the outlined time period. The company has since developed and implemented a corrective action plan and has taken the steps to ensure proper compliance with recordkeeping in the future.

The citation, announced Thursday by DFS, said the company failed to file certificates of appointment for its agents, failed to file timely notices of appointment and terminations of agents and to ensure that commissions were paid only to licensed producers. It also failed to provide to its members written acknowledgment of grievances within 15 business days, as required by law.

Benjamin Lawsky, DFS superintendent, said in a media release that consumers have a right to know what their health plans cover, what the plans don't cover, and what they can do when their claims have been denied improperly.

In May, the company was among 15 insurers statewide fined nearly $2.7 million for violating notification requirements about coverage for mental illness under Timothy's Law. The company was fined $101,640 in that case.

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