NEW YORK (Legal Newsline) - New York Attorney General Eric Schneiderman announce a settlement on Friday with an insurance company that allegedly made an undisclosed change to its medical claim reimbursement policy.

As a result of the alleged change to the policy, AXA Equitable Life Insurance lowered reimbursements for many members. The company changed its reimbursement policy as a result of Schneiderman's discovery, honoring the terms of its members' health insurance plans.

Under terms of the settlement, AXA Equitable will pay an estimated $850,000 in restitution to members in New York and outside of the state who were adversely impacted by the change.

"These consumers paid their bills and played by the rules, only to discover their insurance policies had changed with no warning by AXA Equitable. At the very least, consumers should expect that the terms of their health plans are honored," Schneiderman said. "It is unacceptable for AXA Equitable to switch its claim reimbursement policy to one that pays less, without alerting plan members."

Schneiderman's Health Care Bureau alleged that, starting in September and continuing through May, AXA Equitable used data from a third party to reimburse medical claims despite its policy's terms of reimbursement at the usual and customary rate. This change affected several hundred consumers and allegedly resulted in lower medical claim reimbursements for many members.

In addition to the estimated $850,000 in reimbursements to consumers, AXA Equitable also agreed to employ FAIR Health Inc. as its data source for medical claims reimbursement; prepare and file a report with Schneiderman's office containing pertinent information regarding the member restitution process, including the number of notices sent to members, the number of member claims that were reprocessed under the settlement and the total dollar amount of restitution checks issued to members; and pay $30,000 in costs to the state.

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