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Moda Health fined by Oregon regulator over claims payment

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Moda Health fined by Oregon regulator over claims payment

The Oregon Department of Consumer and Business Services ordered Moda Health Plan Inc. to pay $200,000 in civil penalties, but suspended half the amount.

The penalties were ordered following findings that the company violated certain provisions of the Insurance Code, including its failure to promptly pay clean claims and incorrect processing of in-network claims, according to a cease and desist order filed Sept. 30. A clean claim made under a health benefit plan has no defect or impropriety and no required substantiating documentation or particular circumstance that requires special treatment and prevents timely payment, according to the order.

The regulator said it will waive the collection of $100,000 of the civil penalties if Moda Health Plan complies with the order and all other Insurance Code requirements for the two years following the effective date of the order.

"The federal government's decision not to fully meet its obligations under the risk corridor program caused considerable disruption in the [Affordable Care Act] market [which] prompted financial stresses for Moda," Jonathan Nicholas, vice president of strategic communications at Moda Health, wrote in a statement to S&P Global Market Intelligence.

The regulator's decision to waive some of the penalties is due to work the company carried out in early 2018 to address issues related to its failure to promptly pay claims, which was a result of the "financial stresses" the company faced, according to Nicholas.

He said all issues related to the remaining penalties have been fully resolved, the largest portion of which is related to a computer system issue that caused the failure to send notice letters about the delayed claims.