Health Plan To Reimburse $1.2 Million To Consumers

Attorney General Spitzer today announced an agreement with a major New York health plan to reimburse consumers who were required to pay up to $2,000 for services that were supposed to be fully covered by insurance.

"Ensuring that health plans fully cover the services they promise to cover is of critical importance for all New Yorkers in securing access to care," Spitzer said. "This agreement provides coverage of necessary health care services for those who are entitled to it under the plain terms of GHI's policy. The lesson here for all consumers is to know the terms of your policy so that you get all the coverage to which you are entitled."

The Attorney General's inquiry was prompted by complaints from Group Health Incorporated (GHI) members who were assessed co-insurance on inpatient rehabilitation services, physical therapy and diagnostic testing, even though their policy did not allow for such an assessment. Spitzer's investigation revealed that GHI's policy did not contain a co-insurance provision and that the company was improperly assessing co-insurance for inpatient rehabilitation services, physical therapy and diagnostic testing over the past six years.

The co-insurance amount assessed members was 20 percent of the total bill for services, up to a maximum of $2,000. Many health care providers discounted their bills by $2,000 rather than passing the charge on to the member.

GHI acknowledged that its policy did not provide for assessment of co-insurance on members. According to GHI, the co-insurance provision was mistakenly omitted from the policy.

Under terms of the agreement, GHI will reimburse all affected members and health care providers. GHI estimates that the amount of reimbursement due to approximately 760 affected consumers and providers to be $1.2 million. In addition, GHI will pay $10,000 in costs to the state.

GHI, based in Manhattan, serves approximately 2.6 million people in New York with a variety of insurance products. Spitzer commended the company for working with his office to resolve this matter and provide restitution to affected consumers and health care providers.

Spitzer offered the following advice to consumers trying to maximize health insurance coverage and minimize out-of-pocket health care costs:

  • Read your health insurance policy carefully to learn about the extent and limits of your coverage. Take special note of the services for which you have to pay - through co-pays, deductibles or co-insurance - and make sure you understand how much you have to pay and when.
  • Keep a careful record of all health care expenses that may be applied towards your deductible. Keep receipts showing co-payments and co-insurance payments.
  • If you are asked to pay a charge you do not understand, ask your plan to explain the charge and to direct you to the relevant provision of your policy that requires it.

The case was handled by Assistant Attorney General Heather Hussar under the supervision of Health Care Bureau Chief Joe Baker and Albany Section Chief Troy Oechsner.

Consumers may contact the Health Care Bureau's toll-free Health Care Helpline at (800) 771-7755 (option #3 on the automated voice menu).