Horizon Fined & Required to Reprocess Claims—MSNJ Examines Implications of Consent Order
As a result of a limited scope examination, the New Jersey Department of Banking & Insurance (DOBI) and Horizon have entered into a consent order which requires the insurer to pay a penalty in the amount of $500,000. The consent order addresses Horizon’s payments made when it was the secondary insurer to Medicare and its practice of pending claims to determine whether there was a pre-existing condition.
In addition to the $500,000 penalty Horizon has been ordered to reprocess claims where it paid secondary to Medicare and DOBI estimates that this will result in payments of over $5 million to providers and members. These payments will include 12% interest, the statutory amount due when claims are not processed timely. In addition, DOBI established a de minimus repayment amount that may be paid to the state, rather than to the provider or member, and it estimates that this will result in a payment of approximately $1.3 million.
On the issue of pending claims to determine whether there was a pre-existing condition, Horizon has been ordered to disgorge to the State the amount of interest underpaid on claims that were ultimately paid. DOBI estimates this amount of be $1.3 million.
MSNJ and our members have a record of complaints to DOBI concerning Horizon’s practice of routinely pending claims to make a determination on pre-existing conditions. However, MSNJ was unaware of this pending enforcement action. We are taking steps to secure the underlying limited scope examination report and the plan required to address the aged claims for pended pre-existing condition review. MSNJ will also seek information on the revised policy on processing claims secondary to Medicare. While we applaud the work of DOBI to address these two claims payment issues we are concerned about the de minimus amounts to which providers are entitled being directed to the state. We also believe that physicians should be fully entitled to interest amounts when Horizon wrongfully pended payment during pre-existing condition review. It is unclear how that amount will be established without further information which MSNJ is currently seeking.
MSNJ will keep members apprised of developments on the implementation of the consent order and our ongoing efforts to ensure that physicians are made whole for these wrongful claims processing practices.