Insurance Department Exam Finds Highmark Violations, Results in Restitution for Members

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 Highmark Inc., including Highmark Select Resources, Inc.; Highmark Coverage Advantage, Inc.; Highmark Benefits Group, Inc.; HM Health Insurance Co.; and Highmark Choice Co.

“Market conduct examinations are one way of ensuring that insurance companies are operating in compliance with state and federal laws, and often these exams result in findings that will improve processes for both consumers and the company,” said Humphreys. “PID takes its role in consumer protection very seriously and will use our statutory authority to continue to enforce compliance on plans over which we have jurisdiction.”

This examination is the last in a series of market conduct examinations the department undertook on all of Pennsylvania largest health insurers beginning in 2016, to ensure that insurance companies are following state and federal law, including the Mental Health Parity and Addiction Equity Act, with an emphasis on mental health and substance use disorder parity.

“Mental health and substance use disorder benefits are critical protections for consumers,” added Humphreys. “We will continue to be vigilant to ensure that Pennsylvanians are receiving the benefits that they are entitled to, and to be a resource for consumers who are concerned that their mental health and substance use disorder benefits are not being provided in a comparable manner as general medical or surgical benefits.”

The examination on Highmark covers the period from January 1, 2017, to March 31, 2018. The examinations identified violations with premium refunds being untimely following policy cancellation, as well as claims processing, such as claims being denied when they should have been paid, and untimely payment of claims, including claims that had to be reprocessed to correct payment amounts.

The exam found that Highmark was not responding to PID timely when the company would receive inquiries regarding claims from the department. In addition, there were incomplete claim files, and Unfair Insurance Practices Act violations relating to unclear communications with members and claims processing errors.

The examination also found mental health parity violations, including quantitative (QTL) and nonquantitative treatment limitations (NQTL) violations. In these instances, complete and timely QTL and NQTL analyses were not available, there was a lack of evidence that NQTL analyses were completed for the exam experience period, and QTLs and NQTLs were not applied correctly in some plans.

The department has ordered Highmark 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, claims processing problems, including timeliness and accuracy of claims payments, accuracy and clarity in its written communications with members, and accuracy of information provided by customer service representatives to members. Highmark must also address effective and timely services provided to consumers with enrollment and billing issues.

The company must reprocess all claims for which incorrect visit limits or cost-sharing were applied, and proof of payment, including applicable interest, must be provided to PID. The department expects all restitution to be completed by the end of a 24-month quarterly reporting period. Highmark is also ordered to pay a $205,000 penalty.

PID will continue to monitor and verify that Highmark’s corrective actions have taken place, including through quarterly reporting, as well as through a future reexamination. A full copy of the Highmark examination report may be found here.

To date, approximately 60,000 Pennsylvanian consumers have received a cumulative $5.87 million in restitution as a result of the department’s ACA market conduct examinations of other major health insurers since 2018, when the first exam was finished.