HealthNow fined $700K for inadequate benefits explanation

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New York's largest insurer, HealthNow, has been fined $700,000 for failing to provide complete explanation of benefits to its members.

The New York State Financial Services department conducted an audit from 2004 to 2008 and found that HealthNow failed to provide about 164,000 members with the benefits explanations required under state law. Those explanation of benefits also didn't include adequate information telling members how they can appeal claims when they're denied, WGRZ reported.

"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," Superintendent of Financial Services Benjamin Lawsky said in a statement. "This fine reflects the serious and systematic nature of the practices uncovered by the department."

HealthNow, which owns Blue Cross Blue Shield of Western New York, also was fined for failing to comply with recordkeeping requirements and improperly notifying state regulators about its insurance agents and producers, reported The Buffalo News.

In response to the fine, HealthNow said it cooperated with the insurance department's audit and has since implemented a corrective action plan, including deploying technology that helps access necessary documents, Buffalo Business First reported.

HealthNow spokeswoman Julie Snyder added that because the state releases rules and modifications on an almost monthly basis, it's difficult to stay updated with changes even though the company has "people on the legal staff that all they do is assure compliance." But she told Buffalo News that company officials better understand "what the law specified, as it was written," so they can avoid similar problems in the future.

To learn more:
- here's the insurance department statement
- read the Buffalo News article
- see the WGRZ article
- check out the Buffalo Business First article

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