DEPARTMENT CITES HORIZON HEALTHCARE FOR CLAIMS-HANDLING VIOLATIONS
DELAYS, FAILURE TO EXPLAIN DENIALS AMONG THE FINDINGS

TRENTON - As part of the Department of Banking and Insurance's ongoing efforts to protect consumers, Commissioner Holly C. Bakke today released the findings and recommendations of a Department prompt payment examination that reveals claims-payment delays and other violations by Horizon Healthcare of New Jersey, Inc.

During the review period by the Department's Market Conduct unit from April 2000 to March 2001, a database exam showed that Horizon Healthcare failed to pay 18 percent, or 297,946, of clean claims within minimum time frames specified by statute. In a comprehensive review of randomly selected claims, the examiners found 8 percent that did not meet the time frames.

Late claim payments require 10 percent interest. While Horizon did pay the interest, it was cited for improper general business practice because it failed to pay interest within minimum time frames.

A database query of denied claims revealed a failure to deny 231,885, or 21 percent, of claims within minimum time frames specified by statute. A comprehensive review of randomly selected denied claims showed that 15 percent did not meet the timeframe.

Horizon was also cited for failure to provide reasonable explanations for claim denials.

State law requires health plans to pay properly completed claims within 40 days of receipt if the claim was mailed, or within 30 days of receipt if the claim was submitted electronically. The same time limits apply to denials due to incomplete or improperly completed claims.

In addition to the claims-related violations, the HMO also was cited for failure to promptly respond to direct complaints as well as complaints from the Department.

"These Market Conduct Exams ultimately result in companies correcting bad practices and instituting reforms,'' Commissioner Bakke said. "In the end, the consumer is the winner.''

Commissioner Bakke added the Department would continue to monitor Horizon Healthcare's compliance in each of the areas identified in the report.

A population review by the Department of 55,217 denied mandated benefit claims revealed no erroneous denials.

The Department in November imposed a $200,000 fine against Cigna HealthCare of New Jersey after a Market Conduct Exam revealed claims-handling violations.