by New Jersey Department of Banking and Insurance | 7/31/2007 1:09:29 PM
Company refused fair reimbursement for covered services, Department alleges
TRENTON – On Monday the Department of Banking and Insurance (DOBI) filed an administrative order levying $9,475,000 in fines against Aetna Health Inc. for refusing to appropriately cover certain services provided by out-of-network health care providers – including emergency treatment – in violation of New Jersey rules and regulations.
In June, DOBI received numerous complaints after Aetna issued a letter to health care providers stating that the company had determined what was “fair payment” for services rendered by non-participating physicians and health care facilities and that “additional reimbursement would not be considered.” This included services by non-participating providers that were required under New Jersey law, such as emergency care, services provided by non-participating providers during an admission to a network hospital, and services rendered as the result of a referral or authorization by Aetna.
The letter stated that Aetna determined that 125 percent of the Medicare allowable amount was fair payment, and 75 percent for lab fees and durable medical equipment. As a result, many patients were subject to receiving bills for the amount Aetna would not pay, creating significant financial exposure. Under such circumstances, New Jersey regulations state that members of a health maintenance organization (HMO) have the right to “be free from balance billing by providers for medically necessary services…”
DOBI Commissioner Steven M. Goldman signed the order requiring Aetna to cease its limited reimbursement practice, to reprocess all claims for services rendered by non-participating providers adversely affected by Aetna’s unfair practices, and make payment to those providers based on the billed amount plus 12 percent interest from the date the claim was initially paid, in addition to the monetary penalty.
Aetna has 30 days to request an administrative hearing objecting to the order. If no hearing is requested, the order will then become final.