Acting Insurance Commissioner Michael Humphreys announced the results from a comprehensive Affordable Care Act market conduct examination that the Pennsylvania Insurance Department (PID) conducted on the practices and procedures of Geisinger Health Plan and Geisinger Health Options (Geisinger).
“The Insurance Department’s top priority is consumer protection within the marketplace, and these examinations are an opportunity for the department to ensure that companies are held to high standards and consumers are receiving the benefits to which they are entitled,” said Humphreys. “The results of the exam will see some consumers receiving restitution, as well as expected process improvements within the company.”
The Insurance Department is charged with upholding fair business practice standards for consumers, companies, and insurance professionals. This work involves researching and resolving complaints from consumers, investigating allegations of misconduct by insurance companies, agents, brokers, and others, and ensuring that practicing professionals are properly licensed.
Geisinger was cooperative during the examination, which covers the period from January 1, 2015, to March 31, 2016, and January 1, 2017, to March 31, 2018. A second claims experience period was added because the company indicated that it made several systems changes from 2016 to 2018, including the implementation of a new medical claims processing system. The examinations identified violations within claims processing, including claims being denied when they should have been paid, primarily involving mental health and substance use disorder services. These denied claims were largely processed by behavioral health vendors, until 2019, when the company brought all behavioral health operations in-house.
The examination also reported additional Unfair Insurance Practices Act violations relating to unclear communications with members, maximum out-of-pocket miscalculations, and incomplete claim files. In addition, the exam found mental health parity violations, as complete and timely quantitative and nonquantitative treatment limitation (QTL and NQTL) analyses were not available, nor were QTLs and NQTLs applied correctly in some plans. The company hired an outside consultant in 2019 to help address mental health parity.
The department has ordered Geisinger to take corrective action to address the violations. Claims that were incorrectly processed must be reprocessed and accurately paid with applicable interest. The company must adjust internal controls to address required claims notifications, accuracy and clarity in its communications with members, and oversight of producer appointments and terminations.
The company must also reprocess all claims for which incorrect visit limits or cost-sharing were applied and provide restitution to policyholders that were required to pay more than that policy allowed. The company must provide proof of payment, including applicable interest, to the department as claims are reprocessed. Geisinger is ordered to pay a $125,000 penalty.
To date, approximately 60,000 Pennsylvanian consumers have received $5.87 million in restitution as a result of the department’s ACA market conduct examinations of other major health insurers.
The Insurance Department will continue to monitor and verify that Geisinger’s corrective actions have taken place, including through quarterly reporting, as well as through a reexamination process in the future.
A full copy of the Geisinger examination report may be found here.