Pennsylvania Insurance Department fines Highmark

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Pittsburgh's Highmark Inc. has been fined $50,000 by the state Insurance Department for minor insurance market violations, following a two-year review of the company.

The department says Highmark violated 10 provisions of the Insurance Department Act and the Unfair Insurance Practices Act, and most of the violations dealt with claims denials and failure to remedy those issues expediently.

The review, according to the department, was triggered by a consumer complaint arising from a "problematic upgrade" to Highmark's OSCAR (Optimum System for Claims Adjudication and Reporting) processing system that caused thousands of claims to be denied. The processing and remedying of some of those denials wasn't completed in a timely manner, according to the state's sampling of those claims.

Highmark generally disputed the findings, saying the processing of the claims in question either happened in a timely manner or was delayed for reasons out of the company's control, such as the implementation of new rules from the Centers for Medicare and Medicaid Services.

The Insurance Department also nicked Highmark for failure to provide certain members with explanation-of-benefits paperwork.

"The violations identified do not have a financial impact on our members and do not affect the quality of care Highmark members receive or the high-quality service Highmark has always provided to its members," said company spokesman Michael Weinstein. He also said Highmark "does not believe that there was a violation of Pennsylvania law or regulations," but added that the insurer will be reviewing its claims procedures nonetheless.

At $50,000, the fine is a relatively minor one. Humana Insurance Co., for instance, was fined $299,000 by the Colorado insurance department for market conduct violations two years ago, and last year Aflac paid $1.6 million in fines to Missouri, Idaho and Minnesota.

The Highmark review, conducted in part by the Insurance Department's Market Actions Bureau, began in April 2011, reviewing claims and actions between April 16, 2010, and Jan. 18, 2011. The review wrapped up this month, when the state issued its order and gave it to Highmark officials for review.

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Bill Toland: btoland@post-gazette.com or 412-263-2625.


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