Record Fine against CIGNA Healthcare and CIGNA Behavioral Health

Superintendent of Insurance Alessandro A. Iuppa announced that CIGNA Healthcare of Maine, Inc., and CIGNA Behavioral Health (collectively "CIGNA") have been fined a total of $900,000 for multiple violations of Maine law. The fine, which was assessed as part of a consent decree with the companies, constitutes the largest fine ever levied by the Maine Bureau of Insurance. CIGNA Healthcare of Maine, Inc. holds a certificate of authority to operate in Maine as a health maintenance organization ("HMO"). CIGNA Behavioral Health holds a license as a medical utilization review service that reviews the necessity, use, or appropriateness of behavioral health care services, and as a third-party administrator. The companies were found to have violated Maine law for failing to pay claims on time, failing to pay interest due, failing to keep supporting claim documentation and failing to have adequate procedures for identifying and correcting errors in a timely manner. In addition to the fine, the companies must pay restitution of interest to affected claimants. Both entities must pay combined restitution to affected claimants for interest due for late paid claims of approximately $915, 000 for calendar years 2001 and 2002. For prior years the companies must provide additional unpaid interest for claims processed from September 18, 1999 (the date the present text of Maine's prompt pay law took effect) to January 1, 2001. The companies will have until the end of January 2004 to calculate the additional interest due. The aggregate amount for the four years will be the largest award of restitution ever obtained for claimants by the Maine Bureau of Insurance. In addition to the claims payment issue, the consent agreement resolves a number of other violations. These include: complaint handling, company grievance procedures, records retention, failure to actively market individual health plan coverage, and member notification concerning plan cancellation. One of the most startling findings to emerge from the examination was the fact that CIGNA's own grievance review process overturned initial claim denials, when appealed, a significant percent of the time. The consent agreement requires that the companies file a plan of corrective action for the Superintendent's review and approval that addresses each violation of law listed in the consent agreement. The action plan is due to the Superintendent by December 31, 2003. The Superintendent singled out the grievance process as one area where the Bureau sought reforms. The Bureau of Insurance is part of the Department of Professional and Financial Regulation, which encourages sound ethical business practices through high quality, impartial and efficient regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine. Consumers can reach the Bureau through its Web site at www.MaineInsuranceReg.org; by calling 800-300-5000 in-state; or by writing to Bureau of Insurance, 34 State House Station, Augusta, ME 04333. This information is reprinted with permission of the The Monument Newspaper Copyright 2003.

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