MMA's "Prompt Payment" Campaign Contributes to Anthem Settlement
Superintendent of Insurance Alessandro Iuppa levies record fines against and orders restitution by Anthem companies for failure to pay interest in accordance with Maine's "prompt pay" law.
According to a consent agreement released by the Bureau of Insurance last week, Anthem Blue Cross and Blue Shield of Maine and Maine Partners Health Plan will pay fines of $250,000 and $100,000 respectively for failure to pay interest to subscribers and providers on claims paid more than 30 days beyond the date of submission. The failure constitutes a violation of Maine's "prompt pay" statute, 24-A M.R.S.A. sec. 2436.
During the last several legislative sessions, the MMA has worked with the Maine Hospital Association to clarify the application of this statute to health insurance carriers and HMOs, to adopt a definition of "undisputed claim" in the statute, and to advocate for more aggressive enforcement of the statute by the Superintendent.
The Bureau staff conducted a targeted market conduct examination of the Anthem companies, testing claims paid during the 2nd quarter of 2002, and issued an Examination Report dated January 11, 2003. Anthem staff cooperated with the investigation.
The Bureau discovered that Anthem did not implement a system to automatically calculate and pay interest on overdue claims until April 1, 2002 and prior to that date paid interest only when receiving an inquiry requesting interest. The Anthem companies paid no interest in 1999 and 2000, but paid $23.00 in 2001 and $15,699.99 in the 1st quarter of 2002.
Anthem has identified approximately 387,000 claims from September 19, 1999 through March 31, 2002 that were paid after 30 days from the date of receipt and may be due interest. An estimated $858,000 in interest may be payable during this period, excluding claims paid to Maine hospitals. An additional $370,000 of interest may be payable to Maine hospitals.
Anthem will pay interest on all subscriber claims during the period of the examination with the assumption that they were "overdue" within the meaning of 24-A M.R.S.A. sec. 2436. Anthem will review the 3 largest provider claims during the examination period to verify whether or not they are "overdue," but will pay interest on all other provider claims during the examination period based upon the same assumption. Anthem has committed to pay the interest within 90 days of the Consent Agreement.
The Bureau's examination also revealed violations of the registration provisions of the Preferred Provider Arrangement Act, failure to pay benefits at the "in-network" rate when no participating providers were available within the Rule Chapter 850 access requirements, and the charging of improper rate differentials for individual health insurance plans with similar benefits in violation of Rule Chapter 940.
The MMA's "Prompt Payment" campaign of the last several years was supported by the American Medical Association's Private Sector Advocacy team and many of you! Whether it was responding to the MMA's survey, communicating with your legislators, or filing a complaint with the Bureau staff, your advocacy has produced results!
The Bureau staff will conduct similar examinations of Aetna and CIGNA in the coming months.