Pennsylvania fined HealthGuard, Lancaster, a record $1.6 million and ordered the Highmark subsidiary to pay more than $195,000 in restitution for overcharging and undercharging group subscribers. After completing a state-ordered audit, HealthGuard identified 1,029 groups that had been undercharged and 556 that had been overcharged. The 57,000-member HMO noted that the pricing irregularities were self-reported and said it had already refunded overcharges on premiums. Insurance department officials said the department cited and fined HealthGuard for similar violations in 1998 and 2003. "HealthGuard has abused the flex rating system, misled consumers and disregarded our orders on prior violations," regulators said in a news release, explaining the historically high penalty. Highmark is in the process of phasing out HealthGuard based on an analysis of central Pennsylvania markets. -- by Cinda Becker
Billing errors get Pa. HMO a $1.6 million fine
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