New Jersey regulators fined Aetna Health Inc. $9.5 million Wednesday -- the largest fine ever levied on a health insurer in New Jersey -- for shortchanging out-of-network physicians and leaving patients to pay the balance.
More than 3,000 insurance claims must be reprocessed by the insurer...Aetna must pay "whatever the provider demands [so] that the member is held harmless," said the order. The insurer, which has 521,000 members in New Jersey, said it would ask for a full hearing to dispute the order.
The problems addressed by the state arise when Aetna members go to an in-network hospital for emergency care, surgery, or an in-patient stay. While they are in the care of an in-network physician for most aspects of their treatment, they also receive services -- such as anesthesiology, pathology or radiology -- from doctors who are not in Aetna's network.
The patients are powerless to choose who provides those services. The out-of-network doctors bill the insurer "sometimes 300 to 400 percent higher than what Medicare pays for the same services," said Michener, of Aetna. In June, Aetna informed out-of-network doctors that it would determine what constituted a "fair payment" -- not the doctors. It set the rate at 125 percent of the standard Medicare reimbursement.
Doctors who felt they didn't receive enough payment billed their patients for the balance.
The department of insurance looked into Aetna's new payment policy when physicians complained. Goldman, the insurance commissioner, found that Aetna's actions violated state law.
The state fined Aetna $2,500 for each of the 3,099 claims it says were not properly paid, plus an additional $1.7 million for other violations.
Aetna's spokeswoman said the order "should be a concern to all insurers, employers and consumers in the state of New Jersey." It would encourage more doctors to leave Aetna's network, she said, and to charge higher and higher rates, leading to ever-higher health insurance premiums. source: Bergen Record
More than 3,000 insurance claims must be reprocessed by the insurer...Aetna must pay "whatever the provider demands [so] that the member is held harmless," said the order. The insurer, which has 521,000 members in New Jersey, said it would ask for a full hearing to dispute the order.
The problems addressed by the state arise when Aetna members go to an in-network hospital for emergency care, surgery, or an in-patient stay. While they are in the care of an in-network physician for most aspects of their treatment, they also receive services -- such as anesthesiology, pathology or radiology -- from doctors who are not in Aetna's network.
The patients are powerless to choose who provides those services. The out-of-network doctors bill the insurer "sometimes 300 to 400 percent higher than what Medicare pays for the same services," said Michener, of Aetna. In June, Aetna informed out-of-network doctors that it would determine what constituted a "fair payment" -- not the doctors. It set the rate at 125 percent of the standard Medicare reimbursement.
Doctors who felt they didn't receive enough payment billed their patients for the balance.
The department of insurance looked into Aetna's new payment policy when physicians complained. Goldman, the insurance commissioner, found that Aetna's actions violated state law.
The state fined Aetna $2,500 for each of the 3,099 claims it says were not properly paid, plus an additional $1.7 million for other violations.
Aetna's spokeswoman said the order "should be a concern to all insurers, employers and consumers in the state of New Jersey." It would encourage more doctors to leave Aetna's network, she said, and to charge higher and higher rates, leading to ever-higher health insurance premiums. source: Bergen Record
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