Maryland Fines HMOs $1.6 Million

April 28, 2000

Citing numerous violations in a wide range of categories, the Maryland Insurance Administration entered into consent agreements with four of Maryland’s major health plans and a private review agent that total more than $1.25 million in fines.

In addition, 11 HMOs were ordered to pay $375,000 for failing to provide updates of their provider directories to plan enrollees.

The health plans were penalized primarily for failure to provide proper oversight of their “administrative service providers,” which are contractors that many health plans work with to provide services on their behalf.

Contractors for Aetna U.S. Healthcare, FreeState and United all failed to pay health care providers’ claims within 30 days and did not pay interest on those late claims, as required by Maryland law.

In addition to the fines, an order requiring United Healthcare to pay millions in overdue medical bills was upheld. A Maryland Insurance Administration hearing officer upheld an order issued in December 1999 by Insurance Commissioner Steven B. Larsen for United to pay doctor bills left unpaid after three of United’s contractors went bankr

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