PEDIATRICS Vol. 98 No. 2 August 1996, pp. 248
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DELAYS BY HMO LEAVING PATIENTS HAUNTED BY BILLS

J. F. L. MD

The Health Insurance Plan (HIP) of Greater New York, the state's largest and oldest health maintenance organization (HMO), routinely fails to pay millions of dollars of its members' medical bills each year, leaving subscribers either to cover the bills themselves or to fight collection agencies and lawsuits from doctors demanding overdue payments.

The company hangs on to millions of dollars it invests to improve its bottom line. It pays no penalties because regulators have been lax in policing HMOS.

What's more, as HIP's record for paying claims deteriorated over the last few years, its record for collecting premiums improved, leaving the company with a growing pool of cash. Having this stockpile of money—even temporarily—is a great advantage to HIP, because the company's financial health is heavily dependent on investment income.

If an insurance company slows down claims payment by one day, they have a tremendous profit advantage because of the interest they make on the money. . .All of these skims come out to be a significant amount.