California fines payer $2M for unlawful prescription drug practices

The California Department of Insurance settled with National Health Insurance Co. Aug. 16 for $1.995 million after the payer unlawfully failed to post its formulary online, sold drugs at incorrect prices and denied necessary care and coverage information to members.

National Health sold plans to a total of 500 small group members and 1,100 large group members beginning in 2014. The payer exited the California market in December, but must maintain a compliance program with the state if it reenters the market, according to a news release.

Specifically, the state found that when National Health published its drug formulary online in 2019, it was an outdated list of covered drugs. The state alleged the practice discouraged people with certain conditions from enrolling and discouraged members from submitting certain claims.

In addition, immunosuppressant drugs for multiple sclerosis, HIV, hepatitis B and hepatitis C were placed in the payer's highest cost-sharing tier, including generics. The formulary also required prior authorization for HIV medications, a practice that is illegal in California.

Lasty, National Health was charging members for preventive drugs like contraceptives by placing them into cost-sharing tiers.

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