New York State fined Oxford Health $665,000 for failing to tell members why insurance claims were denied and how they could challenge denials, the Department of Financial Services announced Thursday.
The civil fine covers about 300,000 incidents that took place from 2001 to 2008 in which policy holders of Oxford Health Plans (NY) and Oxford Health Insurance Inc. did not receive information required under state law.
"Insurers must provide their members with clear descriptions of their benefits each and every time a claim is processed," Benjamin M. Lawsky, superintendent of financial services, said in a news release. "Consumers have every right to know what their health plans cover, what the plans don't cover, and what they can do when their claims have been denied improperly."
The companies, which are owned by UnitedHealth Group, largely serve the New York City metropolitan area, including Long Island, department spokesman David Neustadt said. State law requires health insurers to send members explanations of their benefits and information about how they can appeal partial or full denials of coverage.
Lawsky said the fine reflected the "serious and systematic" nature of the companies' practices. The companies were also cited for failing to provide timely and complete information to investigators.
While the companies admitted to the violations, they stated in the settlement that they did not occur due to any conscious company policy to avoid the law. The companies agreed to change their policies so the problems won't recur.
"We understand the importance of these benefits communications, and as a result of our discussions with the Department of Financial Services we have and will continue to enhance our written communications to consumers and physicians around benefits decisions," UnitedHealth Group said in a statement.