ALBANY — For failing to properly inform New Yorkers about ways to appeal to denied health insurance claims, the Capital District Physicians’ Health Plan and an affiliate are being hit with $600,000 in fines, the state Insurance Department announced today.

An Insurance Department investigation found that CDPHP and Universal Benefits repeatedly failed to send to members explanation of benefits notices. Under a settlement agreement, the Albany health insurer will contact more than a quarter of its 400,000 members in 29 central and eastern New York counties, ensuring they received proper denial notices.

A CDPHP spokeswoman did not immediately return a call today.

The settlement covers 121,911 claims filed between 2004 and 2006, though the Insurance Department’s investigation examined the period between 2001 and the first quarter of 2006.

Insurers are required by law to furnish members with EOBs. The notices detail claim processing procedures, costs to be covered by the insurer and consumer and steps for making appeals to claim denials.

“The right to appeal the denial of claims is one of the most important protections that consumers have today, but it isn’t as meaningful if people are not told of their rights by the company,” said Karen Scharff, executive director of Citizens Action of New York, a consumer advocacy organization.

The EOB investigation marks the Insurance Department latest attempt to make Capital Region insurers pay for improperly handing members’ claims. The agency last month hit Buffalo-based HeanlthNow New York with more than $1 million in fines. The parent of BlueShield of Northeastern New York in Latham improperly denied coverage for women seeking infertility coverage.