The New York Department of Financial Services has begun an in-depth investigation into the accuracy of the data used by insurance carriers and health maintenance organizations (HMOs) which they rely upon to request health insurance rate increases.
“At a time when spiraling health insurance costs are an incredible burden for working people, it is essential that we ensure that rate requests are based on fair, accurate information that has not been manipulated. These in-depth audits will allow us to drill down underneath the numbers to make sure they are accurate. For example, we can look at whether insurers are accurately allocating administrative costs and broker commissions. The audits also will help ensure that insurers have proper controls and oversight in place to make certain that data are reliable and accurate. The audits may also help us identify areas where we can take measures to help control costs,” said Superintendent Lawsky.
The audits are being funded under a $4.4 million grant awarded by the U.S. Department of Health and Human Services. New York is one of several states given this grant to enhance premium rate review, improve public access and lend more transparency to the processes used to establish health insurance premiums.
What This Means . . .
- the NYS Department of Financial Services will conduct on-site audits of health insurance carriers and HMO’s that sell health insurance plans regulated by NYS including plans sold to small businesses and individuals;
- Selected rate requests that have already been filed will be reviewed and insurers will not know in advance whether their proposals will be audited;
- Claims, administrative expenses, premiums and claims reserves will be examined and a private accounting firm will DFS with the audits.