The federal government has imposed a civil money penalty of $61,500 against UCare based on audit results showing the Minneapolis-based HMO did not comply with Medicare rules in handling coverage determinations, appeals and grievances related to prescription drug coverage.
UCare is one of 18 insurers facing a penalty in connection with Medicare audits that federal officials issued between September 2017 and February 2018.
While the government said in a February notice the problem at UCare might have affected enrollees, the HMO issued a statement saying that rates and services for health plan members "were never impacted."
"The issue was identified from a routine audit in 2017, and we have already taken corrective action after guidance from [the federal government]," UCare said.
Notice of the penalty was posted on a federal website this week.
The federal Centers for Medicare and Medicaid Services (CMS) typically posts notices about audit reports for Medicare health plans during the first quarter of the calendar year. Last year's batch included a civil money penalty for Minnetonka-based UnitedHealthcare, which is the nation's largest health insurer.
UCare sells Medicare Advantage health plans that include "Part D" prescription drug benefits.
In a Feb. 21 letter to UCare, a CMS official said that within the Part D benefits, UCare misclassified coverage determination or redetermination requests as grievance and/or customer service inquiries. As a result, CMS said, access to the coverage determination and/or appeals process was impeded.
"UCare's failure in these areas were systemic and adversely affected, or had the substantial likelihood of adversely affecting enrollees," the letter states. "The enrollees experienced, or likely experienced, delayed or denied access to covered benefits, increased out-of-pocket costs and/or inadequate grievance or appeal rights."