Aetna Ordered by NJDOBI to Cease Unfair Limitation of Medicare Payments
August 28th, 2007
In a victory for physicians around the country and a strong message to health insurers nationwide, the New Jersey Department of Banking and Insurance (DOBI) fined Aetna Health Inc. almost $9.5 million for an attempt to pay certain out-of-network providers what it deemed a “fair” amount – 125 percent of Medicare – rather than the providers’ billed charges. According to the DOBI ruling, Aetna must directly pay the affected providers’ billed charges, in reparation, for certain services rendered out-of-network.
The $9,457,500 total penalty is among the largest that DOBI has ever levied against a health care insurer. The penalties include:
* $650,000 for misrepresenting its obligations in letters sent to 130 providers (amounting to $5,000 per offending letter)
* $7,747,500 for not attempting, in good faith, to effectuate prompt, fair and equitable satisfaction of the claims for certain services
* $530,000 for not providing its Health Maintenance Organization members and patients the right to be free of balance billing by providers for medically necessary services that were authorized or covered
Richard J. Scott, MD, president of the Medical Society of New Jersey, credited DOBI Commissioner Steven M. Goldman for the ruling.
“DOBI’s order demonstrates that [he] understands the hardships New Jersey’s physicians and their patients can suffer because of the actions of health care companies,” Dr. Scott said. “We commend DOBI for its response to Aetna’s actions, and we appreciate the time the commissioner has taken during the year to listen to what New Jersey’s physicians have to say.”
Aetna has 30 days to object to DOBI’s order.
Visit http://www.msnj.org/Insurance/Dept_of_Banking_and_Insurance/MSNJ_summary_AETNA_order.pdf to read more about the DOBI ruling.
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