North Carolina Insurance Commissioner Jim Long announced a voluntary settlement agreement between the North Carolina Department of Insurance (NCDOI) and two companies, UnitedHealthcare of North Carolina Inc. (an HMO) and United HealthCare Insurance Company.
The settlement comes after NCDOI officials alleged that company practices violated state laws that govern claim settlement and payment. As part of the settlement, the companies agreed to pay a civil penalty of $1.1 million each.
NCDOI officials allege that the companies failed to make prompt and effective corrections to claims system problems when they became aware of them. The NCDOI further alleged that the companies failed to promptly investigate and resolve disputes when they received complaints about claims errors.
“This has been a very difficult case,” Long said. “Every company makes mistakes, and sometimes these mistakes aren’t fixed the first time around. We understand that. But the complaints we received about the United companies indicated an ongoing problem that was just not improving. Over time, we concluded that these were not isolated cases and that system changes by the companies were needed – and we were adamant that steps be taken to correct them.”
As part of the voluntary settlement agreement, the companies do not admit to violating any state laws or regulations. In addition to paying the civil penalties, the companies have already conducted an in-depth study of their operations and have prepared a plan to address the concerns. The plan charts changes to the claims systems and also ways to better address claim-related complaints. The companies also agreed to keep Department officials apprised of their progress.
The agreement comes after nearly five months of meetings between the Department and the two companies. “This has been a long process for all involved. These companies have already made investments in improving their operations to provide some of the operation and service improvements that are needed; however, there is much more work to be done,” Long said. “The companies have been cooperative with the Department and they have committed to us their continued cooperation.”
As required by the North Carolina Constitution, the money paid to the Department will be distributed to the state public school system.
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