The insurance giant UnitedHealthcare could pay up to $20 million to state regulators as part of an agreement to settle allegations that the company violated state laws in its claims processing.
Under the settlement, UnitedHealthcare has agreed to pay about $12.2 million up front to 36 states and the District of Columbia. The payout could grow to $20 million if other states join the settlement.
The company has also agreed to a 3-year process improvement plan that will run through the end of 2010. The company will be required to self-report data quarterly and annually on how it performs on a set of national performance standards. These benchmarks will focus on claims accuracy and timeliness, appeals review, and consumer complaint handling. A lack of compliance with the benchmarks could result in additional financial penalties, according to the National Association of Insurance Commissioners.
The settlement follows a multistate investigation that found errors in claims processing such as not applying correct fee schedules and deductibles. There were also frequent violations of prompt payment rules, according to the New York State Insurance Department, one of the lead parties in the settlement.
The settlement was praised by the National Association of Insurance Commissioners and the states involved. UnitedHealthcare also praised the settlement as evidence of how the industry can work with state regulators.
The District of Columbia and the following states signed on to the agreement: Alabama, Alaska, Arkansas, California, Connecticut, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, West Virginia, and Wyoming.