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STATE OF WASHINGTON
OFFICE OF THE i:NSURANCE COMMISSIONER

In the Maller of
Order No. 19-0240

MOLINA HEALTHCARE OF W AOIC No. 136


\VASHINGTON, INC., NAIC No. 96270

Hea]th Maintenance CONSENT ORDER LEVYING


Organization. A FINE

This Consent Order Levying a Fine ("Order") is entered into· by the Insurance
Commissioner of the state of Washington ("Insurance Commissioner0), acting pursuant to the
authority set forth in RCW 48.02.060 and RCW 48.46.135, and Molina Healthcare of Washington,
Inc. This Order is a public record, and will be disseminated pursuant to Title 48 RCW and the
Insurance Commissioner's policies and procedures.

BASIS:
1. Molina Healthcare of Washington, Inc. ("Molina0 or "the Company") is a Health
Maintenance Organization domiciled in the state of Washington and duly authorized to engage in
the business of insurance in the state of Washington.

Anesthesiology Network Adeq uacy


2. Beginning in June 2017, the Insurance Commissioner's Consumer Advocacy
division identified a significant increase in the number of complaints filed by Molina members,
alleging that they had been balance-billed by non-participating anesthesiologists in relation to
Molina coverage. Looking back to June 2017, Molina identified I, 770 members who were

CONSEITT ORDER LEVYING A FINE State of Washingt0n


ORDER NO. 19-0240 Office of Insurance Commissioner
PO Box402S5
LA-1586447. 15920S0 · I Olympia, WA 98504-0255
balance-billed by non-participating anesthesiologists for services between June 2017 and 2018,
)
totaling 2,3 I 5 claims.
3. Through discussion with the Insurance Commissioner, Molina agreed to an
unaudited voluntary remediation program to make all affected consumers w hole, reimbursing
amounts that w ere balance-billed and paying out $18,928.95 in interest to consumers directly.
Molina negotiated with several non-participating anesthesiologist groups, reporting in December
2018 that seven (7) of the ten ( 10) targeted anesthesiologist groups were now under contract.
4. WAC 284-170-200(6) states that an issuer must establish and maintain adequate
arrangements to ensure reasonable proximity of network providers and facilities to the business or
personal residence of enrollees, and located so as to not result in unreasonable barriers to
accessibility. Issuers must make reasonable efforts to include providers and facilities in networks
in a manner that limits the amount of travel required to obtain covered benefits.
5. WAC 284-170-260( I) states that provider directories must be updated at least
monthly ...[and] ... an issuer must post the current provider directory for each health plan online,
and must make a printed copy of the current directory available to an enrollee upon request as
requi�ed under RCW 48.43.SI0(l)(g).
6. WAC 284-170-260(2) states that for each health plan, the associated provider
directory m�t include, for each provider, the specialty area or areas for w hich the provider is
licensed to practice and included in the network; any in-network institutional affiliation of the·
provider, such as hospitals.w here the provider has admitting privileges or provider groups w ith
which a provider is a member, and whether the provider may be accessed without a referral.
7. WAC 284-170-260(7) states that an issuer must include infonnation about the
network status of emergency providers as required by WAC 284-170-370.
8. WAC 284-170-370 states that an issuer must make good faith attempts to contract
w ith provider groups offering services w ithin hospital emergency departments, if the hospital is
included in its network. Such evidence of good faith efforts to contract will include documentation
about the efforts to contract but not the substantive contract tenns offered by either the issuer or
the provider groups. If the issuer is unsuccessful in contracting with provider groups offering
services w ithin contracted hospital emergency departments, the issuer's provider directory must
CONSENT ORDER LEVYING A FINE 2 State of Washington
ORDER NO. 19-0240 Office oflnsuraru:e Commissioner
PO Box40255
LA-1586447, 1592080 · I Olympia, WA 98504-0255
prominently note that while the hospital's emergency department is contracted, the providers
within the department are not.

Mammograms and Resgonse Issues


9. The Insurance Commissioner's Consumer Advocacy unit reviewed 137
complaints, and found seven (7) instances (5.1%) where responses to the Insurance Commissioner

were not filed electronically, and six (6) instances (4.4%) oflate or inadequate responses.
I 0. WAC 284-30-360(2) states that upon receipt of any inquiry from the Insurance
Commissioner concerning a complaint, every insurer must furnish the Insurance Commissioner
with an adequate response to the inquiry within fifteen working days after receipt of the Insurance
Commissioner's inquiry using the Insurance Commissioner's electronic company complaint
system.
11. WAC 284-30-650 states that it is an unfair practice for an insurer, and a prohibited
practice for a heaJth care service contractor or a health maintenance.organization, to fail to respond
promptly to any inquiry from the Insurance Commissioner relative to the business of insurance. A
lack of response within fifteen business days from receipt of an inquiry will be considered
untimely. A response must be in writing and submitted using the Insurance Commissioner's
electronic company complaint system.
12. Molina applied cost-sharing to 470 mammogram claims between January 19, 2016
and October 2018. Molina re-adjudicated the claims and paid an additional $14,176.57 to providers
without interest.
13. WAC 284-43-5642(9)(e)(ii) states that a health plan must cover "preventive and
wellness services, including chronic disease management" in a manner substantiaJly equal to the
base-benchmark plan. Mammogram services, both diagnostic and screening (RCW 48.21.225,
48.44.325, and 48.46.275) are such services.
14. WAC 284-43-5800(4) states that an issuer may not require cost-sharing for
preventive services delivered by network providers, specifically related to those with an A or B
rating in the most recent recommendations of the United States Preventive Services Task Force,
women's preventive health care services recommended by the U.S. Health Resources and Services

CONSENT ORDER LEVYING A FlNE 3 State of Washington


ORDER NO. 19-0240 Office of Insurance Commissioner
PO Box40255
LA-1586447. 1592080 - I Olympia., WA 98504-025S
Administration (HRSA) and HRSA Bright Futures guideline designated pediatric services. An
issuer must post on its web site a list ofthe specific preventive and wellness services mandated by
PPACA that it covers.

Emergency Room Deductible Accumulator and Denial ofAutism Therapy


15. One of Molina's Marketplace plans was incorrectly programmed whereby a
deductible was erroneously applied to emergency room visits, when it should have been a copay.
According to Molina, the programming error affected claims only in 2017, and was corrected in
December ofthat year. Molina identified 209 such claims, reprocessed them and paid an additional
$90,260.24 including interest.
16. WAC 284-170-43 1( I ) states that every participating provider and facility contract
shall set forth a schedule for the prompt payment ofwnounts owed by the carrier to the provider
or facility and shall include penalties for carrier failure to abide by that schedule. At a minimum,
these contract provisions shall conform to the standards ofthis section.
17. RCW 48. 18. 190 states that no agreement in conflict with, modifying, or extending
any contract of insurance shall be valid unless in writing and made a part ofthe policy.
18. RCW 48.18.520 states that every insurance contract shall be construed according
to the entirety of its terms and conditions as set forth in the policy, and as amplified, extended, or
modified by any rider, endorsement, or application attached to and made a part ofthe policy.
19. From January 20 14 through July 2018, Molina improperly denied 25 claims
submitted from four (4) members for Autism therapy services that should have been covered.
Molina had originally built their Marketplace plan using Medicaid configuration, which in 2014
did not cover the specific Autism therapy at issue. Molina corrected the programming issue and
reprocessed all Autism therapy claims back to January I , 2014, when the plan was first introduced,
paying an additional $9,705 to providers including interest.
20. RCW 48.46.291(1) provides that, (f]or the purposes ofthis section, "mental health
services" means medically necessary outpatient and inpatient services provided to treat mental
disorders covered by the diagnostic categories listed in the most current version ofthe diagnostic
and statistical manual of mental disorders, published by the American psychiatric association, on
CONSENT' ORDER LEVYING A FfNE 4 State of Washington
ORDER NO. 19-0240 Office of losurance Commissioner
PO Box 40255
LA-1586447, 1592080 · I Olympia. WA 98504-0255
July 24, 2005, or such subsequent date as may be provided by the Insurance Commissioner by
rule.
21. RCW 48.46.291(2)(c)(i) sta!es that [a]II health benefit plans offered by health
maintenance organizations that provide coverage for medical and surgical services shall provide
[f]or all health benefit plans delivered, issued for delivery, or renewed on or after July l , 2010,
coverage for mental health services.

Improper Appeal Process and Incorrect Provider List


22. A Molina Marketplace consumer ("Conswner A") was referred by her provider to
Seattle Cancer Care Alliance ("SCCA") for a diagnostic ultrasound and mammogram following a
physical examination. She had received a provider directory in November 2017 indicating that
SCCA was an in-network provider. However, Molina paid the bill at out-of-network rates. A
review of Molina's network demonstrated that SCCA was not included in the Marketplace plan's
network, but is covered in Molina's Medicaid network. Molina eventually agreed to reprocess and
pay the claim as though ii was in-network. It remains unclear how or why Consumer A was
provided a network directory with incorrect information.
23. WAC 284-170-260(4) states if an issuer maintains more than one provider network,
its posted provider directory or directories must make it reasonably clear to an enrollee which
network applies to which health plan.
24. In the course of attempting to resolve the coverage dispute with Molina directly,
Consumer A submitted a written appeal with Molina on July 24, 2018. Per Molina, the Appeal
Specialist assigned to this matter did not follow standard protocol for tracking this appeal, failing
to provide a written response within the timeline established by the plan's grievance procedures.
25. RCW 48.43.530(5)(c) states that to process an appeal, each plan that is not
grandfathered and each carrier offering that plan must make its decision regarding the appeal
within thirty days of the date the appeal is received.
26. RCW 48.46.100 states a health maintenance organization shall establish and
maintain a grievance procedure, approved by the Insurance Commissioner, to provide reasonable
and effective resolution of complaints initiated by enrolled participants concerning any matter
CONSEm ORDER LEVYING A FINE 5 State of Washington
ORDER NO. 19-0240 Office of Insurance Commissioner
PO Box 40255
LA-1586447, 1592080 • I Olympia, WA 98504-025S
relating to the interpretation of any provision of such enrolled participants• health maintenance
contracts, including, but not limited to, claims regarding the scope of coverage for health care
services; denials, cancellations, or non.renewals of enrolled participants' coverage; and the quality
of the health care services rendered, and which may include procedures for arbitration.

Retroactive tennination due to invoicing error


27. A Molina Marketplace consumer ("Consumer B") receiving an Advance Premium
Tax Credit ("APTC") received notice in October 2018 that Molina had retroactively cancelled her
2017 coverage. In February 2017, the Washington Health Benefit Exchange ("the Exchange")
notified Molina that Consumer B was no longer entitled to the APTC, increasing her monthly
premium from $488.l6 to $844. 1 6. Molina's system failed to update her premium, continuing to
display the premium owed as if she was still receiving the APTC. Consumer B continued to pay
the lower monthly premium displayed on her Molina account portal.
28. Prior to contacting the Insurance Commissioner, Consumer B contacted Molina
directly in November 2018, seeking redress. Molina told her that she would need to pay the six (6)
months of premium difference owed in order to get the 2017 coverage reinstated, totaling
$4,220.80. Following contact from the Insurance Commissioner, Molina issued her a technical
refund on the account to reflect the correct premium, reversed the retroactive termination, and paid
a host of claims that had gone unpaid due to the retroactive termination.
29. Molina subsequently identified this error as systematic rather than isolated, and
identified 1 ,314 members affected by this error from January 20 1 7 through January 201 9, an_d
8,3 12 claims for those members between January I , 2017 and February 8, 201 9 which were
reviewed and rernediated. Molina corrected all of the impacted invoices. Molina additionally paid
8% interest to all overcharged members.
30. RCW 48.18.180( I) states that the premium stated in the policy shall be inclusive of
all fees, charges, premiums, or other consideration charged for the insurance or for the procurement
thereof.
31 . RCW 48.46.380 s tates that every authorized health maintenance organization, upon
canceling, denying, or refusing to renew any individual heal� maintenance agreement, shall, upon
CONSENT ORDER LEVYING A FINE 6 State of Washington
ORDER NO. 19-0240 Office of Insurance Commissioner
PO Box. 40255
LA - 1586447. 1 592080 • I Ol ympia, WA 98504--0255
written request, directly notify in writing the applicant or enrolled participant as appropriate, of
the reasons for the action by the health maintenance organization. Any benefits, terms, rates, or
conditions of such agreement which are restricted, excluded, modified, increased, or reduced shall,
upon written request, be set forth in writing and supplied to the individual. The written
communications required by this section shall be phrased in simple language which is readi ly
understandable to a person of average intelligence, education, and reading ability.
32. RCW 48.46.130(2) states that after providing written notice and an opportunity for
a hearing to be scheduled no sooner than ten days following such notice, the Insurance
Commissioner shall make administrative findings and may, as appropriate impose a penalty of not
more than ten thousand dollars for each and every unlawful act committed which materially affects

the health services offered or furnished.


33. RCW 48.46. 1 35 provides that after hearing or upon stipulation by the registrant and
in addition to or in lieu of the suspension, revocation, or refusal to renew any registration of a
health maintenance organization, the Insurance Commissioner may levy a fine against the party
involved for each offense in an amount not less than fifty dollars and not more than ten thousand
dollars.
34. B y failing to maintain adequate arrangements to ensure reasonable proximity of
network providers and facilities, faiJing to make good faith attempts to contract with a sufficient
nwnber of provider groups offering services within hospita1 emergency departments, failing to
timely respond to inquiries of the Insurance Commissioner, failing to provide responses in writing
and submit them using the ln.surance Commissioner's electronic company complaint system,
erroneously applying cost-sharing to mammograms, erroneously applying a deductible to
emergency room visits, improperly denying Autism therapy claims, failing to follow grievance
procedures, failing to maintain an accurate provider directory, failing to fol low standard protocol
for tracking appeal, failing to provide a written response within the timeline estab1ished by the
plan's grievance procedures, and retroactively terminating coverage due to a systems failure, the
Company violated WAC 284- 1 70-200(6), WAC 284-170-260, WAC 284- 1 70-370, WAC 284-30-
360(2), WAC 284-30-650, WAC 284-43-5642(9)(e)(ii), WAC 284-43-5800(4), WAC 284- 1 70-
43 l ( I), RCW 48. 1 8. 1 90, RCW 48. 1 8.520, RCW 48.46.29 1 , RCW 48.43.530(5)(c), RCW
CONSENT ORDER LEVYING A FINE 7 State of Washington
ORDER NO, 19-0240 Office of Insurance Commissioner
PO Box 40255 · .
LA -1 586447, 1 592080 - I Olympia, WA 98504-0255
48.46 . 1 00, R�W 48.1 8. 1 80( 1 ), RCW 48 .46.380, justifying the imposition of a fine under RCW
48.46. 1 30(2) and RCW 48.46. l 35.

CONSE1'7 TO ORDER:
The Insurance Commissioner of the state of Washington and the Company agree the best
interest of the public will be served by entering into this Order. NOW, THEREFORE, the
Company consents to the following in consideration of its desire to resolve this matter without
further administrative or judicial proceedings. The Insurance Commissioner consents to settle this
matter in consideration of the Company's payment of a fine, and upon Sl:!Ch tenns and conditions
as are set forth below:
I. The Company acknowledges its duty to comply fully with the applicable laws of
the state of Washington.
2. The Company consents to the entry of this Order, and in doing so waives any and
all hearing or other procedural rights, and further administrative or judicial challenges to this
Order.
3. By agreement of the parties, the Insurance Commissioner will impose a fine of Six
Hundred Thousand Dollars ($600,000.00) with Two Hundred Thousand Dollars ($200,000.00)
suspended on the conditions that:
a. The Company pays Four Hundred Thousand Dol lars ($400,000.00) by June 1 7,
2019.
b. The Company commits no further violations of the insurance statutes and/or
regulations which are the subject of this Order for a period of two years from the
date this Order is entered. Notwithstanding the foregoing, the Company will not be
in violation of this condition for: (i) matters raised or discovered by the Gompany,
its auditor, or the Insurance Commissioner during performance of the Compliance
Plan, set forth in Exhibit A hereto, and are incorporated i nto the Corrective Action
Plan, as defined in Exhibit A, provided the Company maintains compliance with
the tenns and conditions outlined therein or (ii) any issues currently under a Market
Conduct Action.
CONSENT ORDER LEVYING A FINE 8 State of Washington
ORDER NO. 1 9-0240 Office o f Insurance Commissioner
PO Box 40255
LA -1 5864-i7. 1 592080 • I Olympia, WA 98504--0255
c. The Company complies with and carries out the Compliance Plan, which is hereby
incorporated into this Order by reference as though fully set forth herein.
d. De Minimis violations will not be considered as violations of the Compliance Plan.
4. Notwithstanding any other provision herein, the suspended portion of this fine will
be imposed at the sole discretion of the Insurance Commissioner according to the conditions as set
forth above, without any right to hearing, appeal or advance notice. The suspended portion of the
fine will be paid withln thirty
r
(30) days of the entry of an Order imposing it. Failure to pay the
suspended portion of the fine when imposed shall constitute grounds for revocation of the
Company's certificate of authority.
5. The Company understands and agrees that any further failure to comply with the
insurance Code (WAC 284- 1 70-200(6), WAC 284- 1 70-260, WAC 284- 1 70-370, WAC 284-30-
360(2), WAC 284-30-650, WAC 284-43-5642(9)(e)(ii), WAC 284-43-5800(4), WAC 284- 1 70-
43 1 ( 1 ), RCW 48. 1 8. 1 90, RCW 48. 1 8.520, RCW 48.4o.29 1 , RCW 48.43.530(5)(c), RCW
48.46. 100, RCW 48. 1 8. 1 80( 1 ), RCW 48.46.380) or failure to comply with the Compliance Plan
constitutes grounds for further fines, penalties, and actions which may be imposed in another order
in direct response to further violations. Notwithstanding the foregoing, the Company wil l not be
in violation of this condition for: (i) matters raised or discovered by the Company, its auditor, or
the Insurance Commissioner during perfonnance ofthe Compliance Plan and are incorporated into
the Corrective Action Plan, nor will the Company be in violation of this condition for �e Minimis
violations, provided the Company maintains compliance with the terms. and conditions outlined
therein or (ii) any issues currently under a Market Conduct Action.
6. This Order and the violations set forth herein constitute admissible evidence that
may be considered in any future action by the Insurance Commissioner involving the Company.
However, the facts of this Order, and any provision, finding, or conclusion containoo herein does
not, and is not intended to, determine any factual or legal issue or have any preclusive or collateral
estoppel effects in any lawsuit by any party other than the Insurance Commissioner.
Notwithstanding the foregoing, so long as Company complies with the terms of the Compliance
Plan and rernediates the violations that are identified withln this Order, this Order shall fully
resolve the violations that are identi fled herein and shall not be interpreted to provide the Insurance
CONSENT ORDER LEVYING A FtNE 9 State of Washington
' ORDER NO. 1 9-0240 Office of lnsumncc Commissioner
PO Box 40255
L'.' -] 586447, 1 592080 • I Olympia, WA 98504-0255
Commissioner with the right to institute an additional action against Company for the identified
violations.

EXECUTED this

MOLINA HEALTH CARE OF WASHINGTON, INC.

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Printed Nwne: ?s-ns,--12...... A;;, l �f2---


Printed Corporate Title:__"n
_l'l-
_�_ -'- __r----
·�-� __________

AGREED ORDER:

Pursuant to the foregoing factual Basis and Consent to Order, the Insurance Commissioner
of the state of Washington hereby Orders as follows:
1. The Company shall pay a fine in the amount of Six Hundred Thousand Dollars
($600,000.00), of which the sum of Two Hundred Thousand Dollars ($200,000.00) is suspended
on the condition that the Company fuJly complies with the statutes and/or regulations of the state
of Washington which are the subject of this Order for two years from the date this Order is entered.
Notwithstanding the foregoing, the Company will not be in violation of this condition for: (i)
matters raised or discovered by the Company, its auditor, or the Insurance Commissioner during
performance of the Compliance Plan and are incorporated into the Corrective Action Plan, .
provided the Company maintains compliance with the terms and conditions outlined therein or (ii)
any issues currently under a Market Conduct Action.

CONSENT ORDER LEVYTNG A FINE 10 State o f Washington


ORDER NO. 19-0240 Office of Lnsurancc Commissioner
PO Box 40255
LA -1 586447. 1592080 • I Ol ympia, WA 98504-0255
2. The Company's failure to pay the Four Hundred Thousand Dollar ($400,000.00)
unsuspended portion by June 17, 2019, shall result in the revocation of the Company's Certificate
of Authority and in the recovery of both the suspended and unsuspended amounts of the fine
through a civil action brought on behalf of the Insurance Commissioner by the Attorney General
for the state of Washington.
3. The Company understands and agrees that any further failure to comply with the
Insurance Code (as cited in this Order) or failure to comply with Compliance Plan constitutes
grounds for further fines, penalties, and actions which may be imposed in another order in d irect
response to further violations. Notwithstanding the foregoing, the Company will not be in violation
of this condition for matters raised or discovered by the Company, its auditor, or the Insurance
Commissioner during performance of the Compliance Plan and are incorporated into the
Corrective Action Plan, nor wi11 the Company be in violation of this condition for de Minimis
violations, provided the Company maintains compliance with the tenns and conditions outlined
therein.
4. This Order and the violations set forth herein constitute admissible evidence that
may be considered in any future action by the Insurance Commissioner involving the Company.
However, the facts of this Order, and any provision, finding, or conclusion contained herein does
not, and is not intended to, detennine any factual or legal issue or have any preclusive or collateral
estoppel effects in any lawsuit by any party other than in the Insurance Commissioner.

' aI -+11__ day of


Entered at Twnwater, Washington, this ___ J IJ Ne 2019.

MIKE KREIDLER
Insurance Commissioner

q;:t7�
By and through his designee

Insurance Enforcement Specialist


Legal Affairs Division
CONSENT ORDER LEVYING A FINE 11 State of Washington
ORDER NO. 19-0240 Office of Insurance Commissioner
PO Box 40255
LA-1586447. 1 592080 - I Olympia, WA 98504-0255
EXHIBIT A
COMPLIANCE PLAN

Introduction

This attachment outlines the plan to address the findings in Consent Order Levying a Fine, Order No.
I 9•0240 f1he Order"). The plan is intended to ensure that the business conducted by Molina
Healthcare of Washington, Inc. ("Molina" or "the Company") is in compliance with the Washington
State insurance statutes and regulations.

The plan encompasses two component parts: corrective actions and internal audits with reports to the
Office of the Insurance Commissioner (''OIC").

The audits, reports, information, memoranda, data or other documentation, including the Corrective
Action Plan defined below, that is collected, developed or generated by Molina, its auditor or the OIC
under this Compliance Plan may be marked as confidential and privileged, and any such items will
not be made public by the OIC, subject to disclosure under the Public Records Act, or otherwise
disclosed to third parties. (RCW 48.37.080, RCW Chapter 42.S6.400).

Effective Date of Plan

This plan will become effective upon execution of the Order.

Part I - Corrective Action Plan:

Within thirty (30) days after the effective date of this Compliance Plan, the Company will hire an
independent external compliance auditor ("auditor") that will conduct a review of the Company.
Prior to hiring the auditor, the Company will obtain approval from the Office of the Insurance
Commissioner of the auditor. The Company's Board of Directors will adopt a resolution giving the
auditor authority to conduct an audit and monitor the resolution of all the issues raised by the
Insurance Commissioner in Consent Order No. 1 9-0240 and any other issues discovered during the
audit.

As a general practice, the Company will be included in communications between the OIC and
the independent external auditor. Notwithstanding the foregoing, the Company understands
that there will be instances in which the independent external auditor and the Insurance
Commissioner, or his delegate, will need to independently communicate regarding·any
information related to Company's'performance under this Compliance Plan. In the event that
the Company is not a party to such communication, the OIC agrees to provide the Company
with notice of the communication and its subject matter within a reasonable time.

Within thiny (30) days after the hire of the auditor, the auditor will develop recommendations and an
implementation plan for corrective actions (''Corrective Action Plan"). The Company, or the auditor
if delegated by the Company, will submit this plan for approval by the Insurance Commissioner. The
Corrective Action Plan will ensure that the Company is no longer in violation of the laws and
regulations that are identified in the Consent Order and that the Company has remedied the
following areas of concerns:
P�ge 1
• Network Adequacy (WAC 284- 1 70-200(6); WAC 284- 1 70-260; WAC 284- 1 70-370);
• Response Issues (WAC 284-30-360(2); WAC 284-30-650);
• Mammograms (WAC 284-43-5642(9)(e)(ii); WAC 284-43-5800(4))
• Emergency Room Deductible (WAC 284- 1 70-43 1 ; RCW 48. 1 8. 1 90; RCW 48. 1 8.520)
• Denial of Autism Therapy (WAC 284- 1 70-43 1 ; RCW 48. 1 8. 1 90; RCW 48. 1 8.520; RCW
48.46.29 1 );
• Improper Appeal Process (RCW 48.43.530(5)(c); RCW 48.46. 1 00);
• Incorrect Provider List (WAC 284- 1 70-260(4));
• EJTOneous Invoices resulting i n retroactive tennination (RCW 48. 1 8. 1 80; RCW 48.46.380);
• Unpaid Claims.
• . Any other material issues discovered during the course of the audit.
'
The Company's Corrective Action Plan will include milestones which will ensure timely completion
of all corrective measures to be taken to resolve the violations identified in Consent Order No. I 9-
0240. The Corrective Action Plan will:

a. Identify the issue(s);


b. Identify type of action(s) to be taken and/or has been taken (i.e., changes to procedures,
training, computer systems or tracking, etc.) in regard to each identified issue;
c. Identify what personnel are/were involved in the corrective action;
d. Identify the expected relevant dates of correction of each issue;
e. Provide copies of any material provided as pan of corrective action, i.e. memoranda, written
policies, educational materials, etc.;
f. Provide monthly reports to the Insurance Commissioner and the Company's Board of
Directors; and
g. Identify any currently expected difficulties in implementation of the Corrective Action Plan.

After submission of the Corrective Action Plan, the insurance Commissioner will then respond to the
plan. If the plan is approved, the plan is to be implemented immediately. If the plan is not approved,
the Insurance Commissioner will provide a response detail ing the areas of the plan that require
changes to be acceptable, in which case the auditor and the Company will have seven (7) days to
respond with changes.

Within thiny (30) days after hire of the auditor, the Company, or the auditor if delegated by the
Company, will also submit for approval of the Insurance Commissioner the audit structure and
structure of the monthly reports that will be submitted by the Company or its auditor based upon
implementation of the Corrective Action P.lan, which is detailed in the next section. Once the plan,
audit structure and reports are approved, they will be implemented immediately.

The auditor will continue to work through the Corrective Action Plan implementation process with
the Company to ensure that all corrective measures are taken to resolve the violations in the Order
and the issues raised in this Compliance Plan, as well as any issues that are discovered during the
audit and implementation of the Corrective Action Plan. The auditor will submit monthly progress
reports to the Company and the insurance Commissioner and attend monthly meetings regarding the
implementation process with the insurance Commissioner and the Company. The auditor must
continue working closely with the Company until the Corrective Action Plan is complete and
accepted by· the Insurance Commissioner.

P�ge 2
This infonnation will be sent to:

Daniel Jacobs
Insurance Enforcement Specialist
Office of the Insurance Commissioner
P O Box 40255
Olympia WA 98504-0255
Email: DanieU@oic.wa.gov
FAX: 360-664-2782

Information may be submined through fax or electronic communication

Part 2. Implementation of the Corrective Action Plan:

In order to assess the effects of the corrective action plan, the auditor will perform at least monthly
audits with reports that evaluate whether all milestones and corrective actions set forth in the
Corrective Action Plan are complete or on track for completion by the dates in the Corrective Action
and whether the corrective action has been successful in preventing any funher violations of the
statutes and regulations that are the basis for the above-listed Order and areas of concern identified in
this Compliance Plan. The audits must consist of review of a statistically valid sample or a minimum
of fifty (50) files, whichever is greater, or one hundred percent ( I OOo/4) of all files if fewer than fifty
(50). The monthly reports will include:

a. The action(s) taken to date on each issue identified in the plan (i.e., changes
to procedures, training, computer systems or tracking and reporting, etc.);
b. What personnel are/were involved in the corrective action;
c. When the issue(s) will be corrected and relevant dates;
d. Copies of any material provided as part of corrective action, i.e. memoranda,
written policies, educational materials, etc.; and
e. Identify any current difficulties in implementation of the Corrective Action Plan.

The audit structure, including summaries, will be designed to evaluate whether the Corrective Action
Plan has been successful in correcting the violations of the statutes and'regulations that are the basis
for the Order and the identified areas of concern in this Compliance Plan. The audit summaries will
detail the progress made in implementing the Corrective Action Plan and will report whether the
Company has further violated the statute(s) and/or regulation(s) which are the basis for the Order and
identify any new violations that are not in the Order discovered by the auditor or the Company during
the audit period.

For each additional violation of the Insurance Code found as a result of the audit process, the auditor
will include an explanation of the cause(s) and the remedial action taken or to be taken by the
Company. The Company will undertake appropriate remedial action acceptable to the lnsurance
Commissioner for each violation found within any audit period.

The monthly audits and progress reports will continue through completion of the Corrective Action,
Plan, which is due to be completed two (2) yea.rs from the date of entry of Consent Order No. I 9-
0240. The auditor will provide each audit summary/progress report to the Company and the
Insurance Commissioner no later than seven (7) calendar days after the end of the audited period.

The first focus of the plan will be to develop a detailed response to the violations identified in
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Consent Order 1 9-0240. The Company must ensure that it has sufficient policies and procedures in
place to resolve the compliance violations identified in Consent Order 1 9-0240 and to prevent these
types of violations from continuing in the future.

The Company must develop a plan for detecting consumers who have suffered harm from the
Company's failure to comply with the statutes and/or WACs identified in the Order. These plans for
detecting consumer harm and making consumers whole must be approved by the Insurance
Commissioner and must be implemented immediately after approval. The p lans for making consumers
whole must, at a minimum, include refund of any amount consumers' claims were underpaid or
wrongly denied plus eight percent (8%) simple interest

Provision of the monthly audit reports via fax or electronic means is acceptable.

Monthly audit reports will be sent to:

Daniel Jacobs
Insurance Enforcement Specialist
Office of Insurance Commissioner
P.O. Box 40255
Olympia, WA 98504-0255
DwµelJ@oic.wa.gov Phone:
(360) 725-7264
Fax: (360) 5 86--0 1 52

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