Insurance Division Exam Finds Geisinger Violations, Leads to Restitution for Members

Acting Insurance Commissioner Michael Humphreys announced the results of a comprehensive Affordable Care Act market conduct review conducted by the Pennsylvania Department of Insurance (PID) into the practices and procedures of Geisinger Health Plan and Geisinger Health Options (Geisinger).

“The Insurance Department’s top priority is protecting consumers in the marketplace, and these reviews are an opportunity for the department to ensure companies are held to high standards and consumers receive the benefits they are entitled to,” Humphreys said. “The results of the trial will see some users receive restitution, as well as expected improvements to the company’s processes.”

The Insurance Department is charged with upholding fair business practice standards for consumers, companies and insurance professionals. This work includes investigating and resolving consumer complaints, investigating allegations of misconduct by insurance companies, agents, brokers and others, and ensuring that practicing professionals are properly licensed.

Geisinger cooperated during the investigation, which covered the period from January 1, 2015 to March 31, 2016 and from January 1, 2017 to March 31, 2018. A second trial period for claims was added because the company indicated, that it made several system changes from 2016 to 2018, including the implementation of a new medical claims processing system. The studies found irregularities in the processing of claims, including claims that were denied when they should have been paid, mostly involving mental health and substance use disorder services. These rejected claims were largely handled by behavioral health product vendors until 2019, when the company brought all behavioral health operations in-house.

The inspection also found additional violations of the Unfair Insurance Practices Act related to unclear communication with members, incorrect out-of-pocket maximums and incomplete claims files. In addition, the examination found violations of mental health parity because complete and timely quantitative and non-quantitative analyzes of treatment limitations (QTL and NQTL) were not available, nor were QTL and NQTL applied correctly in some plans. The company hired an outside consultant in 2019 to help address mental health parity.

The department ordered Geisinger to take corrective action to address the violations. Claims that have been incorrectly processed must be re-processed and accurately paid with the applicable interest rate. The company must adjust internal controls to address required notices of claims, accuracy and clarity in its communications with members, and oversight of producer appointments and terminations.

The company must also reprocess any claims to which improper visitation or cost-sharing limits were applied and provide restitution to policyholders who were required to pay more than allowed by that policy. The company must provide proof of payment, including applicable interest, to the department as claims are reprocessed. Geisinger was ordered to pay a fine of $125,000.

To date, approximately 60,000 Pennsylvania consumers have received $5.87 million in restitution as a result of the department’s ACA market reviews of other major health insurers.

The Insurance Department will continue to monitor and verify that Geisinger’s corrective actions have been implemented, including through quarterly reporting, as well as through a review process going forward.

A full copy of Geisinger’s research report can be found here.

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