The Nebraska Department of Insurance and UnitedHealthcare have settled complaints about the company’s past claims process, with the company agreeing to pay the largest fine ever imposed by the department, $650,000.
The settlement was announced this week by state Insurance Department Director Tim Wagner.
Last December, the department said the company violated 18 Nebraska insurance laws more than 800 times, mostly for its handling of claims, from July 1, 2003, through June 30, 2004.
United covers about a quarter million Nebraska residents.
A surge of complaints prompted a department review starting in March 2003.
In 2005 United agreed to settle claims complaints by paying fines of $62,500 and $10,000.
Complaints continued in 2006, the department said, about claims for chiropractic treatments, mental health, newborn baby care, gastric bypasses and other medical procedures.
In January Wagner said complaints against UnitedHealthcare had dropped last year, but the improvements did not remove past violations.
Among United’s failures, as cited by the department, were decision delays, wrong decisions about coverage and bad information given to consumers.
The department also said United didn’t turn over accurate or timely information to the state, didn’t have an adequate network of emergency services or mental health and substance abuse treatment in rural areas and didn’t provide current lists of its care providers.
Wagner said Wednesday that the settlement includes a commitment by United to continue its improvements, which will include giving Nebraska staff members authority to make final decisions on claims and grievances.
“This settlement resolves some historical issues that resulted from market conduct exams and complaints from several years ago that we felt were important to address,” Wagner said. “I’m pleased with the changes UnitedHealthcare has made that have resulted in improved performance,” he said.
William Tracy, chief executive officer of UnitedHealthcare in Nebraska, said the company is happy to have settled the matter.
“We have invested heavily in technology to enhance our customer service and claims payment processes, and are seeing significant results,” he said in a news release. “I am also very comfortable with the degree to which our local health plan maintains control and accountability for customer issues.”
In the consent decree with the state, UnitedHealthcare denied any violations of state law but acknowledged that “errors were made in implementing technological efficiencies.”
A call to Tracy at his Kansas City, Mo., headquarters office was not immediately returned.
The agreement with the state requires United to meet certain customer service performance standards, and it applies to four subsidiaries that operate in Nebraska: United Healthcare Insurance Co.; United Healthcare of the Midlands, Inc.; Midwest Security Life Insurance Co.; and United Behavioral Health.
Frohman said the companies “will be monitored heavily” in meeting the new performance standards and that the monitoring will include other states where United has experienced similar problems. She did not know which states would be involved.
Why did the Nebraska settle with UnitedHealthcare?
“For the state it made sense,” Frohman said. “It’s a more efficient use of our time.
“We got what we were after, which was to see changes and improvement and also to empower their staff to be actually able to solve claims … and give folks in Nebraska some answers, some finality.”
She said United has made improvements and that the state complaint file indicates that the company now “falls within the norm.
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