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New York hospitals reach settlement

Executive Briefings Digest, April 25, 2006

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The New York Attorney General's (AG) office on February 14, 2006 reached settlements with two hospitals that allegedly billed patients for services that were covered by their insurance plans.

The settlement will require New York City-based Beth Israel Medical Center and New York-Presbyterian Hospital to refund the patients and reform billing practices. Specifically, the hospitals agreed that when they submit bills to health plans, they will not bill consumers until the plans notify them that the patient may be liable, according to a release from the AG's office.

The AG's Health Care Bureau investigated the hospitals after receiving complaints from consumers who received bills and letters from the hospitals threatening financial liability, even though they were participating providers with the consumers' health plans and the consumers had followed all of the rules of their health insurance coverage. The AG's office determined that the hospitals had improperly "balance-billed" consumers by attempting to collect the bill from individuals after health plans had failed to respond to the claims.

Source: Strategies for Healthcare Compliance

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