PENNSYLVANIA HMO agrees to pay penalty over pricing

It is the largest penalty the state has issued against a health insurer.
HARRISBURG (AP) -- A Lancaster-based HMO subsidiary of Highmark Inc. has agreed to pay a penalty of $1.6 million for pricing health insurance policies at rates not approved by state regulators.
HealthGuard of Lancaster Inc., which serves about 57,000 enrollees in central Pennsylvania and the Lehigh Valley, also has paid refunds of at least $195,000 to correct the overpriced policies.
"This is the largest penalty we have ever levied against a health insurer, and we strongly believe that a significant fine was warranted for these pricing violations," Randy Rohrbaugh, a state deputy insurance commissioner, said Wednesday.
This is the third time the company has committed violations of this kind since 1998, said Insurance Department spokeswoman Rosanne Placey.
Highmark said the "pricing irregularities" were self-reported.
"New policies and procedures have been instituted to ensure that HealthGuard premiums are set in compliance with all state law," the company said.
Discontinuing HealthGuard
Highmark, the state's largest health insurer, is discontinuing HealthGuard in 2006.
Highmark provides health insurance in western Pennsylvania under the name Highmark Blue Cross Blue Shield and health insurance in central Pennsylvania under the name Highmark Blue Shield.
Highmark Blue Shield also provides health insurance in conjunction with Blue Cross of Northeastern Pennsylvania in northeastern Pennsylvania and Independence Blue Cross in southeastern Pennsylvania.