A provider-based HMO in Montana has agreed to pay $11,500 to six clinics that serve low-income people as penance for selling unauthorized health plans.
State Auditor Mark O'Keefe announced in Billings, Mont., late last month that New West Health plan had agreed to the settlement.
New West is a not-for-profit HMO owned by Deaconess Billings Clinic; St. Peter's Hospital in Helena, Mont.; Community Medical Center in Missoula, Mont.; and physician-hospital organizations affiliated with each of those hospitals. New West was licensed by the state insurance division in December 1997 and was marketing its insurance plans this spring. But these plans had not been individually approved as state law requires, O'Keefe said.
The plans have since been approved with slight modifications and are being sold by New West.
The HMO had to stop marketing its insurance plans for about a week this spring, according to Thomas Clinch, its chief financial officer. Clinch said the plans were approved about a week after New West received notice of the violation.
"I do give the department credit for giving the plans prompt approval," Clinch said. The company and the insurance division reached an "amicable settlement," he said.
O'Keefe said New West cooperated with his office, and he is glad the company will increase competition in Montana.
The insurance division said New West offered or issued health plans to 61 large and small employer groups before those plans were approved. New West agreed to pay $1,000 for each of the six plans sold and $100 for each of 55 offers made.
"I wanted to make sure every community in which violations had occurred would share in the settlement," O'Keefe said. New West is authorized to sell coverage in 19 counties clustered around Billings, Helena and Missoula.
O'Keefe directed the $11,500 to be apportioned to federally qualified health centers in Billings, Helena and Missoula. The allocations were also based on the number of people each clinic served.
The beneficiaries are Cooperative Health Center in Helena, Deering Community Health Center in Billings, Helena Indian Center, Indian Health Board in Billings, Missoula Indian Center and Partnership Health Center in Missoula.