Failure to Properly Notify the HMO

The HMO under a mid-size college’s health plan denied payment of health costs for an employee who was hospitalized following an accident. The HMO claimed that the employee never notified the HMO of her hospitalization, as required under the health plan. In fact, the employee had called her employer’s plan administrator, who advised her that because she’d called the employer it wasn’t necessary that she call the HMO, forgetting that the notification rules had recently changed. The employee sued her employer and the plan administrator over the benefits denial, alleging that she had received improper advice. Total Cost: $500,000.