DCBS Media Release

March 9, 2001
For More Information:
John Piper, 503-947-7213

QualMed fined $50,000 for insurance violations

QualMed Oregon Health Plan, Inc., has been fined $50,000 for violating state insurance laws and administrative rules.

The fine was imposed after a market conduct examination of the company's operations from April to July 1999 by the Insurance Division of the Oregon Department of Consumer and Business Services (DCBS).

QualMed, now known as Health Net Health Plan of Oregon, Inc., admitted to:

• Failing to pay health insurance claims without conducting a reasonable investigation. Insurance Division examiners found that QualMed refused to pay almost a third of randomly selected claims without a reasonable investigation.
• Improperly imposing pre-existing condition limits and not giving individuals credit for previous coverage under the Oregon Health Plan.
• Improperly using individual health statements to determine whether to provide group health coverage.

The Insurance Division found similar violations by QualMed during past market conduct examinations.

QualMed has been licensed in Oregon as a domestic health care service contractor since 1989. Its main administrative offices are in Clackamas.

The company was fined $15,000 by the Insurance Division in 1996 for improperly denying emergency room claims without conducting a reasonable investigation.

Final Order