Insurance company Health Net fined nearly $350,000 for enrollment miscues
- Health Net fined nearly $350,000 for incorrect information sent to thousands of Medicare clients
- Medicare officials said it was the second time Health Net sent incorrect information to customers
- The errors involved information about cost-sharing terms for hospital stays and pharmacy discounts
Private health insurance company Health Net gave the wrong information to nearly 14,000 Medicare customers in Arizona during open enrollment last fall, a miscue that prompted the federal government to fine the health insurer nearly $350,000.
In levying the fine, the federal government said it was the second time Health Net provided wrong information about benefits and prescription drug plans to the health insurer’s Medicare customers.
The Centers for Medicare and Medicaid Services said the health insurer did not correct the inaccurate information until more than one month after enrollment started last fall.
Seniors are allowed to change their private Medicare plans during open enrollment from Oct. 15 through Dec. 7 each year. So they must evaluate prescription drug plans and medical coverage benefits of their private plans to decide whether they need to switch based on their personal health or financial needs.
Health Net said that it discovered the problem and mailed the correct information to beneficiaries on Nov. 24 — or about five weeks after enrollment started.
“This was over a month after the open enrollment period had started, and therefore, affected the time in which enrollees could use the information to make a fully informed decision about their Medicare health care and prescription drug options for the 2015 plan benefit year,” Gerald J. Mulcahy, who oversees Medicare’s enforcement of such plans, wrote in a notice disclosing the fine last week.
Woodland Hills, Calif.-based Health Net has until Sept. 15 to challenge the $349,075 fine. Health Net officials said the insurer will respond before the deadline.
“We are sorry for any confusion or frustration our errors caused,” Health Net said in a statement. “We discovered the errors shortly after the materials were mailed last year and notified CMS. And we immediately began the process of sending corrected information to affected beneficiaries.”
Health Net initially told 4,865 Medicare customers that its plan did not charge more for the first five days of a hospital stay when the plan actually increased the patient’s responsibility by $25 each day.
The insurer also incorrectly told 9,098 customers that its network included pharmacies with lower cost-sharing terms, but the plan did not include such “preferred cost-sharing” pharmacies.
Health Net was one of six private Medicare health insurance plan fined last week over incorrect benefits information sent to customers. In 2013, Health Net also was fined $86,530 over a similar issue.
A CMS official said that Medicare recipients who choose a plan based on incorrect information provided by a health insurer may qualify for a special enrollment period that allows them to switch plans. Enrollees can call 1-800-Medicare to request a special enrollment period.
In February, Medicare regulators also fined Phoenix-based Mercy Care’s Medicare Advantage prescription drug plan a total of $202,200 following a contract audit. The audit concluded that Mercy Care did not meet Medicare’s requirements for drug formulary and benefits. It also cited issues in the insurer’s coverage determinations, appeals and grievances.
Mercy Care’s “failures in these areas were systemic and resulted in enrollees experiencing inappropriate delays or denials in receiving covered benefits and increased out-of-pocket costs,” CMS enforcement officials said.