UnitedHealth To Pay $12 Million To Settle Claims System Complaints

UnitedHealth Group officials on Thursday announced an agreement to pay $12 million to several states to settle allegations of past problems with the company claims payment system, the Minneapolis Star Tribune reports (Yee, Minneapolis Star Tribune, 9/6).

Thirty-six states and Washington, D.C., will divide the settlement. New York, which has about one million UnitedHealth members, will receive the largest share of the settlement at $4 million (AP/Long Island Newsday, 9/6).

The amount of the settlement could increase to as much as $20 million in the event that other states join (Minneapolis Star Tribune, 9/6).

In addition, as part of the settlement, UnitedHealthcare, the largest health insurance division of UnitedHealth, agreed to a three-year "process improvement" plan. Under the plan, UnitedHealthcare will submit quarterly reports and seek to meet annual benchmarks in efforts to reduce errors in claims payments, pay claims more promptly, and improve the system used to process claims and appeals. UnitedHealth could pay as much as $20 million in fines for failure to meet the benchmarks (Fuhrmans, Wall Street Journal, 9/7).

The settlement will resolve allegations that resulted from a joint investigation by the states led by New York, Arkansas, Connecticut, Florida and Iowa. The investigation found that UnitedHealth applied incorrect fee schedules and deductibles, did not pay claims promptly and failed to address problems with the company claims payment system identified by state regulators (AP/Long Island Newsday, 9/6).

Comments

Iowa Insurance Commissioner Susan Voss said, "This is more than writing a check. It's an intensive three-year process. We're going to be holding their feet to the fire. If I was another major insurer, I'm going to be watching this very carefully" (Minneapolis Star Tribune, 9/6).

UnitedHealthcare CEO Kenneth Burdick said that the settlement "establishes an efficient, transparent framework for working collaboratively with states using objective performance measurement standards" (Wall Street Journal, 9/7).

According to Sheryl Skolnick, an analyst with CRT Capital Group, the settlement is a "bargain" for UnitedHealth (Minneapolis Star Tribune, 9/6).

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