New Jersey HMO fined up to $500,000
The New Jersey Department of Health and Senior Services is fining a state HMO up to $500,000 for violating new managed care consumer protection laws, American Medical News reports. It is the first time that a health plan has been penalized under the state's managed care consumer protection law, which took effect in 1997.
First Option made patients reschedule surgeries at other hospitals when some anesthesiologists would not renew their contracts at lower rates, the suit states.
First Option violated the state's new law, under which the state health department now regulates managed care plans, in three ways, the department says. First, the HMO failed to give patients 30 days notice that their health providers were being terminated from the plan's network. Second, they failed to notify the health department of changes in its provider network. Finally, they did not inform doctors and members that hospitals where anesthesiologists did not renew their contracts were not available as full-service hospitals in the network.
The fines are based on how many patients and providers were affected and will likely range from $100,000 to $500,000. The company can appeal the fine.
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