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Department Finds That Half of the State’s Hmos Are Not Paying Claims on Time

4/19/2002

TALLAHASSEE – Florida Treasurer and Insurance Commissioner Tom Gallagher today announced that 15 of Florida's 32 health maintenance organizations (HMOs) have paid $550,000 in fines to the Florida Department of Insurance for failing to make timely payments to physicians and other health care providers as required by law.

"It was critical to determine if there was a trend of late-payment problems in the industry," Gallagher said. "Where there were serious violations, we required immediate action by HMOs to ensure medical providers are reimbursed in a timely manner."

Under Florida law, HMOs are required to pay, contest or deny a claim within 35 days after the claim is received by a contracted medical provider. If a claim is denied or contested by an HMO, a provider has a minimum of 35 days to respond to the HMO's request for additional information. The HMO must make a final decision to pay or deny the claim within 45 days of receiving additional information from the provider. All claims must be handled within 120 days.

Today's announcement follows a comprehensive six-month review of the industry's payment of claims, which included an analysis of claims payment information. A comprehensive review of HMOs claims paying practices had not been done since the state's prompt payment law passed in 1998.

Under the 15 consent orders issued by the department, the HMOs have agreed to implement measures to ensure the timely payment of claims no later than June 1. In all cases, the HMOs agreed to the orders and paid the fines. Information on the 15 HMOs, including the violations found by the department and the amount each HMO was fined, is attached.

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Fines Imposed on HMOs for statutory violations


+35 Days
+120 Days
Fine

Aetna U.S. Healthcare

X
$25,000

Av-Med, Inc.

X
$25,000

Beacon Health Plans
X
X
$50,000

CIGNA Healthcare of Florida

X
$25,000

Florida 1st Health Plan, Inc.

X
$25,000

Foundation Health
X
X
$50,000

Health Options, Inc.
X
X
$50,000

Healthplan Southeast, Inc.
X
X
$50,000

Humana Health Plan, Inc.
X
X
$50,000

JMH Health Plan

X
$25,000

Mayo Health Plan, Inc

X
$25,000

One Health Plan of Florida

X
$25,000

United Healthcare of Florida

X
$25,000

Vista Health Plan
X
X
$50,000

Wellcare HMO, Inc.
X
X
$50,000






Total Fines


$550,000