Maryland Fines Five Health Care Insurers for Late Payment, Other Violations

Maryland has levied $1.4 million in fines against five health insurers, including Aetna U.S. Healthcare, state Insurance Commissioner Steven Larsen announced Sept. 5. The Washington Post reports that violations included failing to comply with the state's prompt payment laws, not paying interest on late claims, and neglecting to "monitor" subcontractors. According to Larsen, Aetna was the most "egregious offender." Aetna was fined a total of $850,000 -- a "state-record" -- of which $600,000 was for failing to monitor the actions of one of its subcontractors, American Physical Therapy Network. State investigators found that 447 of 498 APTNet claims were not paid within the maximum 30 days, and that interest was not paid on late claims. According to the Post, the average claim to APTNet was 55 days old, and the oldest was nearly two years old. Aetna also failed to publish a list of therapists hired by APTNet, and the therapist group failed to pass on higher reimbursement rates to providers when Aetna raised them, state investigators found. Aetna has since decided to terminate its contract with APTNet, effective Oct. 30. In a separate action, Aetna was fined $250,000 for "failing to comply with an agreement ... with the state to pay podiatrists what they are owed." The Post reports that the fines come one year after Aetna was fined $400,000 for making late payments to doctors and hospitals (Brubaker, Washington Post, 9/6). According to Larsen, if Aetna continues to have problems, it could face harsher penalties. "We have put Aetna U.S. Healthcare on notice that our next action will be substantially more severe. If we go back a third time, it's likely we will suspend their certificate of authority," Larsen said, which would ban Aetna from enrolling new members in Maryland "for a period of time" (Salganik, Baltimore Sun, 9/6). The Post reports that the fines come "as Aetna struggles to repair its image nationally." For its part, Aetna spokesperson Walt Cherniak said, "We have acknowledged that we have service issues that need to be addressed. We've had a nationwide effort for more than a year to resolve these issues. We feel we're making significant progress." Cherniak added that Aetna is "committed to complying with Maryland's insurance laws and regulations" (Washington Post, 9/6). Fines against four other health care insurers include:

• A $300,000 fine against United Healthcare of the Mid-Atlantic for late payments in 30% of hospital claims and 38% of physician claims. United also must pay $202,000 in interest to doctors and hospitals.
• A $150,000 fine against mental health insurer Magellan Behavioral Health for "failing to keep up to date on claims." Last year, Magellan was temporarily by the state. Larsen said Magellan reported the new problems itself and has "taken action to correct the situation."
• A $75,000 fine against Dental Benefit Providers of Maryland for failing to pay interest on late claims.
• A $25,000 fine against CIGNA Dental Health of Maryland for not having its forms approved by state regulators and "other administrative problems" (Baltimore Sun, 9/6). For further information on state health policy in Maryland, visit State Health Facts Online.