Regulators in Pennsylvania have reached a $500,000 settlement with a health insurer accused of violating state law regarding treatment in the state’s emergency rooms.

Tom Corbett

Pennsylvania Attorney General Tom Corbett announced that an agreement was reached with HealthAmerica Pennsylvania/HealthAssurance Pennsylvania, a Coventry Health Care plan, over rejected emergency room treatment claims. The Harrisburg, Pa.-based insurer will reprocess claims and pay bills for more than 600 consumers as part of the settlement.

The insurer also agreed to pay $10,000 in civil penalties and $50,025 to cover the cost of the investigation, attorney fees, court costs and future public protection and consumer education activities by the attorney general’s office.

The attorney general’s office, in collaboration with the Pennsylvania Insurance Department, determined that HealthAmerica skirted a state law requiring health insurers to apply a reasonable standard for medical necessity when determining the need for emergency room care. The insurer, the offices found, used standards that were too high and, therefore, improperly denied claims.

The plans administered by HealthAmerica include a “prudent layperson” standard, where claims are payable when a reasonable person, experiencing similar signs or symptoms, would seek emergency medical care, the attorney general’s office said.

Claims review

“These consumers went to emergency rooms because they believed they needed immediate care for serious medical conditions – something that is supposed to be covered under the HealthAmerica plans,” Corbett said in a statement. “Using higher standards to reject these claims allegedly left hundreds of Pennsylvania consumers facing thousands of dollars in medical bills that should have been paid by their insurance.”

A review of HealthAmerica emergency room claims between 2001 and 2007 found 631 Pennsylvania customers whose claims appeared to have been improperly denied, and as a result, the insurer will reprocess and pay $445,981 worth of those claims, officials said.

HealthAmerica also is required to change its claims review procedures to ensure that adequate information is obtained and proper standards are used to determine whether claims for emergency room treatment should be approved or rejected, according to Corbett’s office.

Further inquiry

Pennsylvania Insurance Commissioner Joel Ario said that his office will look at other health insurers operating in the state to ensure that they are also following state law regarding emergency room treatment.

“No one should have to worry whether their insurance company will cover emergency care when they believe their life is at risk,” said Ario. “That is why we use certain standards that require health plans to base coverage of emergency care on a patient’s symptoms, not the final diagnosis.”

Ario’s office is encouraging consumers to read their insurance handbooks to understand their own responsibilities for coverage and care as well.

“Many of us will find ourselves in need of a trip to the emergency room at some point in our lives, and these trips don’t come at a small cost,” Ario said. “If you believe you needed immediate emergency treatment and your insurance company will not pay the claim, then you have a right to appeal the denial.”