National Health Insurance Company agrees to pay state over $1 million in settlement

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SACRAMENTO, Calif. (KTXL) — The National Health Insurance Company has agreed to pay more than $1 million to the California Department of Insurance as part of a settlement for its prescription drug practices, the commissioner announced Tuesday. Ricardo Lara Insurance.

The department is fined $1.995 million for the insurance company‘s prescription drug and patient information practices that state officials have called unfair and discriminatory, according to a press release.

Insurance officials say the state Department of Insurance alleged that National Health violated California law by failing to post a list of covered prescription drugs online and charging higher prices for some drugs since 2015. The department alleged that National Health denied consumers proper information for them. coverage decisions.

As of Dec. 31, 2021, National Health no longer offers health coverage in the small and large employer group markets, according to state officials.

If the company decides to re-enter the health insurance market, there is an agreement with the state requiring National Health to maintain an industry-standard compliance program.

“This settlement is a victory for consumers and a notice to other insurance companies that we will continue to uphold California law, protect consumers, and ensure companies conduct their business fairly and transparently,” said Lara in a press release. “California law is clear. Insurance companies cannot design drug lists that discriminate against consumers with serious health conditions.

“Patients should have a correct and up-to-date list of covered medications and be given the freedom to make medical decisions based on accurate information,” Lara said.

During National Health’s review, the insurance department said the company committed a number of violations in its coverage of small and large employer groups.

“When National Health finally released its online drug formulary in 2019, it was not the current list of covered prescription drugs, but an outdated list of previously covered drugs,” the insurance department said. in the press release. “The department alleged that this practice discouraged the enrollment of people with certain health conditions. The incorrect form gave the appearance of reduced benefits for consumers with special conditions, potentially deterring policyholders from submitting claims or persuading those seeking a policy to seek coverage elsewhere.

Department says National Health has placed almost all immunosuppressive drugs for transplant rejection, all covered drugs for multiple sclerosis, HIV, hepatitis B and hepatitis C in the sharing tier, officials say. higher costs, regardless of the brand name.

By placing all of these prescription drugs at a higher cost, the ministry said “people with chronic conditions may have been discouraged” from purchasing coverage because of the price.

Insurance officials said National Health illegally requires prior authorization for all HIV drugs. According to the ministry, prior authorization allows the insurer to determine whether a drug is needed before it is covered, rather than leaving that decision to the patient’s doctor.

“The prior authorization requirement may result in the delay and denial of drug coverage for a consumer whose physician has determined that a prescribed drug is medically necessary,” insurance officials said.

Preventative drugs, contraceptives and other pharmacy items were placed in a tier where they must be covered at no cost in tiers subject to cost-sharing with patients, officials said.

According to the Department of Insurance, health insurance companies may not offer coverage that unreasonably discriminates against people with chronic conditions in California. Companies must provide coverage that “ensures the affordability of outpatient prescription drugs,” the department said.

State health insurance laws also require co-payments, coinsurance, and other cost-shared prescription drugs to be reasonable for patients so they can have necessary medical access to outpatient prescription drugs. .

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