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HMOs in N.J., North Carolina, Washington Fined

MANAGED CARE May 1998. © MediMedia USA
State Initiatives

HMOs in N.J., North Carolina, Washington Fined

MANAGED CARE May 1998. ©1998 Stezzi Communications

Regulators in three states have imposed hefty fines on HMOs in the last two months for a wide range of infractions. North Carolina's insurance department fined Durham-based Doctors Health Plan a record $500,000 for 51 violations. The HMO was cited for illegally requiring members to get prior authorization for out-of-network emergency services. The plan also failed to hold quality-review meetings, conduct annual reviews of its quality management program or develop a plan for out-of-area care.

The state is letting the company, which has lost nearly $10 million in two years, put off payment until the state decides it won't hurt the plan financially or its service to members.

North Carolina also imposed a $300,000 fine on the state's Blue Cross and Blue Shield plan and its HMO unit, Personal Care Plan of North Carolina, for record-keeping violations. The state said that during routine inspections last year, the plan delayed or failed to produce requested information. Blue Cross says new procedures have fixed the problem, but it still faces an on-site records survey by the National Committee for Quality Assurance, which has downgraded the HMO's accreditation status.

New Jersey's Department of Health and Senior Services has told First Option Health Plan that it will fine it between $100,000 and $500,000 for violating consumer protection laws. The state says the plan failed to provide adequate notice of reductions in its provider network to the department, patients and physicians. The amount will depend on the number of affected enrollees.

Washington State Insurance Commissioner Deborah Senn fined two Portland, Ore., plans owned by the Sisters of Providence $90,000 for using rates and contracts not filed with the state. Good Health Plan of Washington and Providence Health Care admitted the errors and agreed to the fines.