N.Y. Regulators Fine HMO $3 Million

New York insurance regulators said they fined Oxford Health Plans Inc. $3 million because of the HMO’s inability to pay claims on time and other irregularities. State Insurance Superintendent Neil Levin said Oxford will also pay an estimated $500,000 in restitution to customers and health-care providers. The fine is the second-largest ever levied by New York insurance regulators and the largest ever against a health insurer. Oxford also agreed not to pass on the cost of penalties to its customers and to improve its payment and accounting practices. It is not the first time that the Norwalk, Conn.-based health maintenance organization has run afoul of New York officials over its payment practices. In August, Oxford agreed to pay 9% interest on claims unpaid after 30 days, a stipulation that New York Atty. Gen. Dennis Vacco estimated would cost the HMO at least $1 million in interest payments. Levin said Oxford has made some improvements in its management team and accounting practices but that it must do more. Oxford shares fell 50 cents to close at $14.63 on Nasdaq.