Recourse For Insurance Claims
Health insurance policy holders, hospitals, physicians - and anyone else who has to deal with managed care companies - now have recourse when the health insurance companies do not pay their claims on time.
Gov. George E. Pataki has signed a new law which will require all health insurers to pay up in a timely manner - that is, within 45 days - or suffer fines of up to $500 a day. The law takes effect in January.
"We're very happy," said John Calagna, a spokesman for the New York State Insurance Department, who said he has received "thousands of complaints" over the past several months from both health care providers and patients, mostly about the managed care companies.
Fines To The State
Simple claims should be paid within about two weeks, Mr. Calagna said, noting that subscribers and providers need not wait the full 45 days before filing a complaint with the Insurance Department once the law takes effect.
Fines, which the insurance department can also impose on insurance companies which do not "respond to its inquiries in a timely manner," will go into the New York State general fund, Mr. Calagna said.
Physicians Suffer
"I wish the fines would be paid to the physicians and providers," said Dr. John J. Ferry Jr., the president of Southampton Hospital, which has had to wait several months to be paid millions of dollars by managed care companies.
Under individual contracts with the insurers, "we [providers] have been forced to accept discounted fees for services we have always provided - in part because of the promise of timely payment," Dr. Ferry pointed out. "I feel especially badly for the solo physician who doesn't have real cash reserves and has had to wait months to be paid."
He added, however, that he was "delighted" that the "statewide crisis is now appreciated by the legislators and the Governor."
Oxford Probe
Not surprisingly, the H.M.O. Council of New York, a trade organization representing 32 health maintenance organizations with six million subscribers, opposed the legislation.
"We did not feel there was a need for it, because there was no evidence of a widespread problem in New York State," Leslie Moran, a spokeswoman, said yesterday.
"We felt the state should impose a standard on itself as well," said Ms. Moran, adding the New York State was "historically late" with its own payments.
Dennis Vacco, the State Attorney General, recently reached an agreement with Oxford Health Plans, which had a particularly troublesome payment record, requiring the company to pay its claims within 30 days. Mr. Calagna said that the Insurance Department's examiners are continuing their investigation of Oxford, and "may have something to say about it in the next few months."
The new law specifies that claims processed after the 45-day period must include interest at 12 percent per year, or at the corporate tax rate, whichever is greater. Fines can be levied against insurance companies, agents, or brokers, and cannot exceed $10,000. Those who violate the law five times within five years, however, can be fined an additional $50,000.
Individuals, hospitals, and doctors and other providers can file complaints with the Insurance Department by mail, phone, or on the Internet. Its mailing address is: New York State Insurance Department, Consumer Services Bureau, 25 Beaver Street, New York, N.Y. 10004, its toll free number is: 1-800-342-3736, and the Web address is: www.ins.state.ny.us .