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State fines Excellus $1 million for denying customers’ contraceptive coverage

By Eric Reinhardt


Excellus Building SignThe New York State Department of Financial Services (DFS) has fined Excellus Health Plans, Inc. $1 million for “wrongly” denying contraceptive coverage.

A DFS investigation found that the health insurer wrongly denied contraceptive coverage to customers due to internal system and process errors, failed to promptly pay or deny claims, and failed to acknowledge or resolve consumer grievances within time frames required by law.

A DFS market-conduct examination found that Excellus erroneously denied 1,000 claims for contraceptive coverage between 2008 and 2013 “due to an error in coding.”

“DFS is taking this action to ensure that women receive the reproductive healthcare benefits they are entitled to under New York law,” Maria Vullo, financial-services superintendent, said in a news release. “Health insurers cannot deny New Yorkers of their State-mandated contraceptive coverage for any reason. In addition, consumers are entitled to prompt payment of claims and responses from their health insurers, as required by New York Insurance Law.”

Under the consent order, Excellus has agreed to take all steps necessary to correct all violations and to comply with New York State Insurance Law and Regulations in the future, DFS said.

Elizabeth Martin, VP of communication for Excellus’ eastern markets, provided BJNN with the following statement regarding the DFS fine.

“The key findings in the report relate to items from a few years ago. Those issues were addressed when we completed a major transformation project which consolidated several computer platforms down to one. The changes we made have brought about significant improvements to our claims payment system,” Excellus said.

Rochester–based Excellus BlueCross BlueShield is Central New York’s largest health insurer.


The investigation

DFS is currently investigating whether insurers are complying with New York’s contraceptive coverage laws, following an undercover sting that found many insurers were giving inaccurate information to consumers.

Under New York State Insurance Law, health insurers must provide contraceptive coverage with no copayments, deductibles or any out-of-pocket costs. They must also provide their members accurate information about their rights to this coverage.

The DFS investigation also found that Excellus did not make prompt payment of certain health-care claims, payment of interest on some claims and failed to deny some claims on a timely basis.

Excellus also failed to acknowledge grievances by 482 customers within 15 business days and failed to resolve 339 grievances within the 30-day period mandated by New York Insurance Law, per the release.

Under state law, health plans in New York are required to provide coverage for all contraceptive drugs and devices. All “non-grandfathered” health plans must cover at least one form of contraception in each of the FDA-approved contraceptive delivery methods without co-pays, coinsurance or deductibles.

DFS recently issued a report describing an undercover sting investigation that discovered that certain New York health insurers are providing consumers with “incorrect” information about contraceptive coverage.


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BJNN file photo by Eric Reinhardt


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