Pennsylvania regulators have issued a $1 million civil penalty against UnitedHealthcare on allegations the health insurer violated a number of state and federal laws when paying medical claims, particularly for patients seeking treatment of autism and substance use disorders.
Minnetonka-based UnitedHealthcare will spend another $800,000 on an outreach campaign to educate consumers about their mental health and substance use disorder benefits, according to the agreement announced Monday. The insurer must pay restitution to consumers for wrongly denied or delayed claims, although it's not yet clear exactly how much.
"The violations within this area were very disappointing as they negatively affected some of our most vulnerable populations," Jessica Altman, the state's insurance commissioner, said in a statement. Her department's report covered the period from January 2015 through March 2016 and found what it called "extensive noncompliance with mental health parity and prompt pay laws."
UnitedHealthcare said in a statement that the company worked closely with insurance regulators in Pennsylvania to address their concerns.
"While we have already made changes, we will continue to make improvements to help individuals get care under their plans," the company said. "We will work closely with [regulators] to help more Pennsylvanians meet their mental health needs by providing additional resources and education to help them understand and access their benefits."
The examination of UnitedHealthcare's market conduct is the latest in a series reports by Pennsylvania regulators that cover a wide variety of issues, including whether insurers are covering mental health and substance use disorder services in parity with coverage for medical or surgical care. In January, regulators in the state issued a $190,000 penalty against Connecticut-based Aetna; a report last year prompted Blue Cross of Northeast Pennsylvania to pay $90,000 in a settlement.
The latest state report lists dozens of examples where regulators say UnitedHealthcare failed to comply with laws governing how insurers should handle claims for payment of medical services. Regulators looked at 109 cases, for example, where UnitedHealthcare closed medical claims without making payments, and found violations in 17 cases where the company should have paid within 45 days and did not implement reasonable standards to promptly investigate the claim.
The report noted particular concern with the company's coverage for services to patients with autism spectrum disorders and substance use disorders. Regulators found 53 cases where UnitedHealthcare imposed non-quantitative treatment limits with respect to substance use disorder benefits "in a manner that was applied more stringently than medical-surgical benefits," according to the report.
In a written response to regulators, a UnitedHealthcare official said the examination found no violations in several areas such as company operations and management.
"Company operations and claims processing procedures are in compliance with applicable state and federal laws and regulations," wrote Carrie Birmingham, a regulatory affairs analyst. "As we have discussed with the [department], the violations identified in the examination report were not willful or intentional."
UnitedHealthcare is the nation's largest health insurer. It's a division of Minnetonka-based UnitedHealth Group, which is Minnesota's largest company by revenue.
The Mental Health Parity and Addiction Equity Act of 2008 requires health plans to provide parity in coverage of mental and physical health care services. Patient advocates seeking better access to care under the law have highlighted this year class-action litigation against UnitedHealth Group's behavior health business, a lawsuit that features an Eden Prairie man who overdosed after the insurer cut off treatment coverage.
A judge ruled that "the emphasis on cost-cutting that was embedded in [United Behavioral Health's] guideline development process actually tainted the process, causing UBH to make decisions about guidelines based as much or more on its own bottom line as on the interests of the plan members."
The review of UnitedHealthcare in Pennsylvania, however, was not prompted by any particular complaints about behavioral health coverage, a spokeswoman said. Instead, regulators were concerned about general compliance with insurance laws.
"UnitedHealthcare has been ordered to address many of the violations through changes in company practices and procedures," the state insurance department said in a statement. "The department also acknowledges the company has been cooperative in its response to the violations."