UnitedHealthcare is paying a $2.5 million fine in New Jersey after regulators alleged various insurance violations ranging from a failure to promptly comply with outside appeals of coverage decisions to wrongly telling people they couldn't buy individual insurance policies due to medical conditions.
The New Jersey Department of Banking and Insurance said last week the fine was the largest issued by the agency against a licensee in nine years.
Minnetonka-based UnitedHealthcare, which is the nation's largest health insurer, said in a statement: "We worked closely with [the agency] to address its concerns and made improvements where needed."
In a consent order, the New Jersey commissioner of banking and industry said she opened a review of UnitedHealthcare and subsidiaries after learning of potential violations.
State law in New Jersey provides for an independent review of final decisions by carriers to deny, reduce or terminate benefits when those decisions are contested by a patient or health care provider.
When an independent review organization determines that the coverage decision deprived someone of medically necessary covered services, the ruling is binding on the carrier, according to the consent order, and should result in prompt provision of coverage.
The UnitedHealthcare subsidiary "failed to comply promptly and without undue delay with multiple [outside appeal] decisions rendered in 2016 and 2017, with delays ranging from 39 days to 217 days," the consent order says.
In the individual market, which primarily serves self-employed people, a UnitedHealthcare subsidiary in 2017 sold health benefit plans on a "guaranteed issue" basis, according to the consent order. That means the company would not engage in "medical underwriting," in which carriers ask health questions and can restrict access to coverage based on the answers.
For the first eight months of 2017, the UnitedHealthcare subsidiary's website had no information about individual coverage options but directed consumers to phone a specified 800-number. A department employee called the number and was told the insurance company did not sell individual health plans in New Jersey but instead offered medically underwritten plans with limited benefits.
The UnitedHealthcare subsidiary initially told regulators the information provided to the department employee was an isolated error due to improper training of a customer service representative, according to the consent order. But regulators investigated further.
"The department requested and reviewed recordings of 434 calls from New Jersey residents," the consent order states. "Recordings included several in which [the insurer] improperly asked medical questions of callers, provided incorrect information about individual health benefit plans offered ... and erroneously told callers they were ineligible for individual coverage due to medical conditions."
The UnitedHealthcare subsidiary told regulators the website was revised in late August to provide correct information about individual health benefit plans, according to the consent order, and that call-center practices were adjusted. The insurer also said "the problems with the call center and website were not intentional," the consent order states.
The consent order also details allegations related to processing payment appeals by health care providers; failure to provider certain appeal rights related to prescription drugs; and directing patients to a nondesignated health care provider.