Health Insurer Fined For Violating Independent Review Rules

Washington’s insurance commissioner recently announced a $100,000 fine in response to a consumer complaint that Kaiser Foundation Health Plan, an HMO, ignored consumers’ rights in the health claims appeal process.  The commissioner found that Kaiser failed to follow several rules related to appeals of health insurance claims to an Independent Review Organization (“IRO”).

At issue are rules contained in Washington’s statutes and administrative codes protecting insurance policyholders.  Among other things, Washington law required Kaiser to provide the IRO with any records, documents, or information relevant to the claim within three business days; ensure that expedited reviews are adjudicated within 72 hours of the policyholder’s request; and provide the policyholder the IRO’s name and contact information within one business day.

In Kaiser’s case, the insureds had the right to provide evidence supporting the insured’s claims to the IRO within five days.  However, Kaiser failed to notify most consumers they had the right to do this.  The commissioner also found Kaiser dragged its feet in the IRO process.  Kaiser was found to have failed to timely send claims files to the IRO; failed to process expedited claims on time; and failed to timely give consumers the IRO’s name and contact information.

The commissioner found these violations occurred during the period from January 2016 through March 2017.

Kaiser signed a Consent Order regarding the above violations, pursuant to which Kaiser acknowledged its duty to comply with the law and consented to imposition of the fine.

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