State Regulators Fine Providence $20,000
The health plan failed to explain why it needed additional information before paying claims
May 25, 2011 -- Providence Health Plan was fined $20,000 by the Department of Consumer and Business Services for failing to explain why it needed additional information before paying claims.
From April 2008 through January 2011, Providence received 9,814 claims. Insurers are required to pay or deny a claim 30 days after they receive the necessary information.
“When we became aware of the problem (the need to be more specific in our requests for additional information to pay claims), we took steps to correct it,” said Carrie Smith, director of regulatory compliance and government affairs for Providence. “It’s important to note that all claims were paid accurately."
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As we pull back curtains, health plan behaviors will be shocking to most in a 'normal' business context and more highly regulated/ethical non-profits.
In the instance of an FCHP wielding public funding for Medicaid/Medicare:
The tennis match behavior between a FCHP and their captive customer service/billing company keeps patients and providers in limbo well-past the required window for payment - often forcing them into an appeals and grievance cycle that ultimately costs everyone more money, more harm, more conflict.
In other words the behaviors force the surrounding system to subsidize sub-par infrastructure and performance because the organization is more interested in top-tier executive salary, benefits, board compensation, and returning withhold and surplus to it's members and funding political activity not available to non-profits.
The level of admin funding is a secondary question, the application of that funding is primary. Oregon would do well to incorporate more of a Medicare process whereby expenditure categories are more tightly monitored to prevent the types of abuse rampant in our current OHP contractor community.
Having said all of this, given their structure and mission, I would count Providence (and CareOregon) as being generally more transparent and ethical than the others.
That fact is in my opinion reflected in the level of penalty applied in this case. Some of the other leading FCHPs should be regulated out of business if we expect any hope of creating sustainable healthcare transformation.
$20k---that is less than a tap on the hand----that is not even a suitable fine--what a joke
Not from what I experienced. PHS sent me the required letter saying they needed more time to review my internist's very simple, straight forward bill for an annual gyn exam. The day the clock ran out on that letter I received a second mandatory letter saying they needed more time still. Ultimately my doc was paid nearly three months late.
It was uncomfortable for me as I was seeing that doc for the first time, and I always pay my bills on time. As we stretched into the second month I offered to pay the bill out of pocket, (while also paying my PHS premiums on time), but then they would have had to creditback the money when PHS paid, so we waited it out.
I called PHS when I got the second letter, to ask what the prob was. They told me the issue was how the bill was coded, but there was no indication this was the case.
But were they paid in a timely manner...I expect that is why they were fined.