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State fines Univera's parent for violations; Excellus required to pay $995,000

State insurance regulators have fined the parent of Univera Healthcare almost $1 million for improperly denying emergency room claims and failing to explain coverage to consumers more than 300,000 times.

The Department of Financial Services ordered Rochester-based Excellus Health Plan to pay $995,000 for its denial of 166 emergency room claims and for failing to provide "explanation of benefits statements" when the insurer processed 337,689 claims for drug coverage.

The violations were discovered during a routine market conduct examination of the insurer's records covering a four-year period from 2003 to 2007. The ER denials occurred because of a systems error when claims were processed after patients were treated. Excellus has told the state that it has already reimbursed consumers for the improper denials.

State law requires that insurers must explain what is covered by insurance and how consumers can file an appeal to challenge a denial. Explanation of benefit notices that include that information must be sent whenever a claim is processed. All but a few of the drug claims were covered, but the insurer didn't give proper notices.

"Ensuring that consumers are able to obtain the health insurance coverage they are entitled to receive, especially in emergency situations, is essential," said Benjamin Lawsky, the state's superintendent of financial services. "Consumers need to understand what their insurance covers, what it doesn't cover and how they can challenge an insurer when a claim is denied."

Excellus, which is owned by Lifetime Healthcare Companies of Rochester, owns Excellus BlueCross BlueShield and Univera. In all, Excellus has 1.8 million members across 45 counties, including 165,000 in the eight counties of Western New York through Univera.

Separately, the department also ordered Hartford Life Insurance Co. to credit $24 million to about 300,000 people who bought mass-marketed accidental death and dismemberment insurance because it wasn't spending enough of its premium revenue on claims to justify what it charged.

The company will provide current customers with a 35 percent discount for 36 months, or an annual premium of $35, with the credits totaling $24 million.

Hartford also must reduce premium rates for existing and new enrollees by 45 percent, so individuals who buy new policies will pay about $55 a year.

Accidental death and dismemberment policies pay benefits when a customer dies in an accident or loses limbs or sight as a result. The company sold the policies through telemarketing and other means.