ANNAPOLIS – Aetna U.S. Healthcare Inc., the second-largest health plan in Maryland, was fined $850,000 Wednesday by the Maryland Insurance Administration for violating state insurance laws, one of five health plans assessed a total of $1.4 million for violations.
Part of the Aetna fine, $600,000, was the largest single fine levied against a health plan in state history, according to Maryland Insurance Commissioner Steven B. Larsen, who announced the fines.
Three of the health plans — Aetna, United Health Care of the Mid-Atlantic and Magellan Behavioral Health — repeatedly delayed payments on claims filed by Maryland doctors, hospitals and other health care providers. United Health Care also failed to pay interest on some claims that were paid late. Each company has been issued fines of at least $150,000.
Dental Benefit Providers of Maryland will pay $75,000 for not paying interest on claims paid late. CIGNA Dental Health of Maryland will pay $25,000 for other violations.
Maryland law mandates that insurance companies process claims within 30 days, and that interest be paid to providers who don’t reply to claims on time.
Health care providers in Maryland lauded the MIA for imposing the fines, but said more needs to be done to keep insurance companies within the bounds of Maryland law.
“What’s happened today is encouraging,” said Nancy Fiedler, spokeswoman for the Maryland Hospital Association. Fiedler says the MHA monitors the number of days it takes for insurance companies to process hospital claims, and that on average it takes between 64 and 68 days.
Such delays are not only illegal in Maryland, but can present a hardship to physicians trying to pay bills and maintain their own practices.
“Physicians are basically totally reliant on insurance companies to honor their contracts and make timely payments,” said Rockville gynecologist Dr. Burt Littman. “Any delay in these payments affects physicians in terms of their ability to practice and pay their bills.
Littman says that on average, anywhere from 10 to 20 percent of the claims he must file with insurance companies are either delayed or lost. Littman, who is chairman of the Managed Care Committee for the Montgomery Medical Society, says late payments have been a chronic problem for physicians statewide.
Some doctors aren’t convinced the fines levied today will encourage the companies to fix their claims processing systems.
“Many of these insurers are actually repeat offenders,” said new Maryland State Medical Society President Hilary O’Herlihy. “It’s apparent that the current law isn’t strong enough to stop insurers from re-violating the law.”
Insurance companies insist they’re cleaning up their acts, though, and that they’ve been working closely with the MIA and Larsen to improve claims processing.
Aetna spokesman Walt Cherniak said the company has already taken steps to correct problems identified in the MIA report, many of which were left over from last year. Cherniak said the source of the $600,000 fine is a company that Aetna contracts with to process claims, American Physical Therapy Network, or APTNET. Aetna’s partnership with APTNet will end in October, Cherniak said.
Erin Somers, Magellan’s spokeswoman, said many of their violations can be traced to staffing problems the company had a few years ago, when claims became backlogged for lack of staff to process them.
Each company fined signed an agreement with MIA to pay the fines without argument. In addition, United, Magellan and Aetna have all agreed to contribute to an MIA fund used to educate Maryland residents about health care rights and options.
Fiedler of the Maryland Hospital Association remains unimpressed. “You know who has the best record of payment? Medicare,” Fieldman says. “The federal government pays much more promptly than any of the commercial insurers.”