UnitedHealth settles with N.Y. for nearly $4 million

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As part of a multi-state settlement, UnitedHealthcare, an insurance subsidiary of the Minneapolis-based UnitedHealth Group, will pay New York state $3.7 million following a probe of the insurer’s claims processing system, according to New York Business.com.

The complete settlement agreement was $13 million and involved 36 states as well as the District of Columbia. The state of N.Y. will receive an additional $320,000 under a separate agreement regarding the insurer’s violations of the state’s payment statute, claim appeal rules and other regulations.

The Department of Insurance alleged that the investigation of UnitedHealthcare yielded “many errors in claim processing,” such as incorrectly applying fees and deductibles, as reported in New York Business.com. UnitedHealthcare was also accused of violating prompt payment rules, even after the payor was made aware of its errors.

In accordance with the settlement, delayed UnitedHealthcare claims payments will be reviewed and reprocessed with applicable interest dating back to Jan. 1, 2003. Also, the health insurer has agreed to implement a national improvement plan that will be in effect through the end of 2010, which will subject them to multi-state monitoring of the marketing practices.