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STATE OF MAINE BUREAU OF INSURANCE
For the Period January 1, 2005 through December 31, 2008 United HealthCare Insurance Company NAIC Number: 79413
EXAMINATION REPORT PREPARED BY INDEPENDENT
Pursuant to Title 24-A M.R.S.A. § 221, I have caused a Targeted Market Conduct Examination to be conducted of United HealthCare Insurance Company. I hereby accept this Report of Examination and make it an official record of the Bureau of Insurance.
TABLE OF CONTENTS
SECTION I - EXECUTIVE SUMMARY ...................................................................................................... 4
SECTION II - SCOPE OF EXAMINATION ............................................................................................... 8 SECTION III - COMPANY PROFILE ...................................................................................................... 9 SECTION IV - EXAMINERS METHODOLOGY ......................................................................................... 10
SECTION V - RESULTS OF THE EXAMINATION .................................................................................... 19
ADDENDUM - COMPANY'S RESPONSE ............................................................................................... 26
March 30, 2011
Pursuant to Title 24-A M.R.S.A. § 221(5), a targeted Market Conduct examination (the Examination) of selected focus areas including behavioral health-related complaint handling, appeals, policyholder services, provider network, utilization review and pre-authorization practices, company operations and claims practices has been conducted of: United HealthCare Insurance Company (the Company) The Company's records were examined at United Behavioral Health (UBH), which is the Company's behavioral health vendor and a subsidiary of United HealthCare Insurance Company. Its offices are located in Philadelphia, Pennsylvania. The Examination covered the period from January 1, 2005 to December 31, 2008. A Report of the Examination of United HealthCare Insurance Company is, herewith, respectfully submitted.
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Background and Examination Objectives The Maine Bureau of Insurance (the Bureau) is conducting a targeted market conduct Examination of the United HealthCare Insurance Company (UHC or the Company) to assess the behavioral health services provided by the Company. The Bureau's primary objective in conducting the Examination is to evaluate whether mental health and substance abuse benefits are at least equal to those benefits for physical illnesses for a person receiving medical treatment. More specifically, the Bureau's goals and objectives in conducting the Examination includes but is not limited to the following:
RSM McGladrey, Inc. (the Examiners) relied primarily on the review and testing of records and information maintained by the Company concerning certain of their operations included within the scope of the Examination. Where appropriate, the Examiners tendered follow-up inquiries to the Company for response. Interviews with Company representatives were also conducted. Targeted attribute testing was performed consistent with examination processes and sampling methodologies of the Bureau in concert with the applicable State of Maine insurance statutes, rules and regulations and the NAIC Market Regulation Handbook (the Handbook), which was used as a guide. The Examiners reviewed and tested, where applicable, the following areas:
The Examination scope, workplan and testing was developed consistent with the requirements of the Bureau's Rider A - Specification of Work to Be Performed, of the Agreement to Purchase Services (the Agreement). Rider A also establishes the Company's operational areas to be tested. In consultation with the Bureau, certain tests conducted during the Examination may have been modified from that set out in Rider A to meet the needs of the Bureau and to reflect statutes, rules and regulations referenced herein. In testing the above referenced areas, the Examiners were directed to evaluate whether mental health and substance abuse benefits were at least equal to those benefits for physical illnesses for a person receiving medical treatment. In so doing, the Examiners used random samples where appropriate for the areas tested. Also, where applicable and consistent with the requirements of the Bureau, the Examiners utilized qualified clinical professionals, approved by the Bureau, to conduct peer reviews to perform the following:
The Examiners noted observations regarding the Company's claims handling practices, which are listed below in order of priority: Finding #1 The Examiners identified five (5) of 130 denied and zero-paid claims which were not paid within 30 days of receipt, representing potential violations of Title 24-A Chapter 27 §2436(1) of the Maine Insurance Rule. Finding # 2 The Examiners identified two (2) of 130 denied and zero-paid claims, representing failure to adjudicate the claims in accordance with the terms of the policy. Specifically, one claim was paid as authorized for out-of-network, when no authorization was included in the file. Another claim was paid with an incorrect benefit amount of 70%, which was in conflict with the correct benefit amount of 50%. Finally, two claims were denied in violation of Title 24-A Chapter §2436 (1) as not having authorizations when upon review, it was determined the file contained an open authorization certification. The details for each of the above referenced findings are discussed in Section V of this Report. Additionally, where applicable, the Examiners have included Additional Observations in each relevant area of the Examination. SECTION II - SCOPE OF EXAMINATION The scope of the Bureau's Examination was to determine the Company's compliance with applicable mental health parity provisions of the Maine Insurance Rule, Title 24-A M.R.S.A §§ 2842-2844, 4234-A and 4303 as well as Maine's Health Plan Improvement Act and Bureau of Insurance Rule Chapters 191 and 850 for the period of the Examination (the Period), January 1, 2005 through December 31, 2008. The Examination was conducted under the supervision of the Bureau's Director of Consumer Health Care Division and the Director of Financial Analysis. The Report of Examination (the Report) is a report by exception with modification, as references to practices, procedures or files that did not contain exceptions are limited. All unacceptable or non-complying practices may not have been identified. The failure to identify specific Company practices does not constitute acceptance of these practices. RSM McGladrey Inc. personnel participated in this Examination in their capacity as market conduct examiners. RSM McGladrey Inc. provides no representations regarding questions of legal interpretation or opinion. Determination of findings constituting violations or potential violations is the sole responsibility of the Bureau. United HealthCare Insurance Company was incorporated in 1972 and received its Certificate of Authority as a life and health insurer from the Connecticut Department of Insurance the same year. Throughout the years, the Company obtained licenses from other jurisdictions eventually becoming licensed in the District of Columbia and all states, except New York. United HealthCare Insurance Company is a subsidiary of Uniamerica, Inc., a subsidiary of United HealthCare Services, Inc., which is a subsidiary of UnitedHealth Group Incorporated (UHG), a publicly traded company. On December 11, 2006, the Company purchased the Student Insurance Division (SID) from Mega Life and Health Insurance Company. The product provided single school year coverage to individual students at colleges and universities. UHC is Maine's seventh largest domestic health benefits company serving approximately 2,252 enrollees, or 1% of the fully insured market, during the Period based on statistics reported by the Bureau in its brochure titled, "2008 Financial Results for Health Insurance Companies in Maine." United Behavioral Health (UBH), a division of UHG, offers behavioral health benefit management services as well as employee assistance programs. The UBH provider network includes psychiatrists, psychologists, social workers, psychiatric nurses and other mental health and employee assistance providers. The facility network includes hospital inpatient units, residential treatment centers, partial hospitalization programs and outpatient programs. SECTION IV - EXAMINERS METHODOLOGY In accordance with the Bureau's requirements, the Examiners developed random samples, where applicable, to review and test specific attributes associated with policies that were marketed and sold to state of Maine residents. These populations included large group policies, small group policies with more than 20 covered employees and State of Maine employee plan and city and local governmental plans. Also, where applicable, the samples included groups with 20 or fewer employees for which the policyholders had elected mental health parity. Administrative services business, with the exception of the State of Maine employee plan, was excluded from the sample testing. The Company did not underwrite any individual policies in the state of Maine during the Period. The Examiner's sampling methodology was reviewed and pre approved by the Bureau. The Examiners' testing of each focus area was designed to evaluate whether mental health and substance abuse benefits are at least equal to those for physical illnesses for a person receiving medical treatment for any of the categories of mental illness as defined by Maine Insurance Rule, Title 24-A M.R.S.A §§2843 (5-C) and 4234-A (6) and (7). The categories of mental illness were identified in the Bureau's Rider A as defined in the Diagnostic and Statistical Manual (DSM), except for those that are designated as "V" codes by the DSM. The categories include the following:
Company Operations and Management Testing of this focus area included the Examiners requesting certain operational data along with policies and procedures from the Company in effect during the Period. The requested information included:
Upon receipt of the above requested information, the Examiners evaluated the Company's responses for compliance with Maine's mental health parity laws as may be applicable and other related rules and regulations. The results are summarized in Section V. Claims Handling and Settlement Testing of this focus area included requesting a population of mental health claim data and the supporting policies and procedures for the Period. The information requested included:
In response to the Examiners requests, the Company provided a population of 345 denied and zero-paid claim lines which had a behavioral health diagnosis as outlined above and an additional population of 19 claim lines from the SID. The Examiners developed samples approved in consultation with the Bureau and utilized Audit Control Language (ACL) to select a random sample of 130 denied and zero-paid claims using a 95% confidence level, from the population of 345. All 19 claim lines from the SID were reviewed. The Examiners' methodology regarding the Company's claim adjudication practices included reviewing sampled claims as well as any prior or subsequent adjudication of the sample claim. The prior or subsequent claims may have included a payment or denial of the sampled claims. The claims were reviewed to ensure compliance with Maine Mental Health Parity Laws as outlined in Rider A. The Examiners also reviewed the member's insurance policy for each sampled claim to determine if mental health coverages and limits were at least equal to the member's medical benefits. The Examiners also conducted interviews with Company representatives and received training from the Company related to the Company's systems to which the Examiners would need access. The results of the claims review are summarized in Section V. Utilization Review and Pre-Authorization Testing of this focus area involved requesting a population of utilization reviews (UR) and pre-authorization denials and the policies and procedures the Company had in place during the Period. The information requested included: Utilization Review
In response to the Examiners' data requests, the Company provided the requested documentation and a population of only one (1) UR performed. The Examiners reviewed the one (1) UR identified by the Company. UHC's UR files were reviewed to ensure compliance with Maine Mental Health Parity Laws as outlined in Rider A. Additionally, the Examiners reviewed UHC's mental health UR processes in order to determine if they were equivalent to UHC's UR medical processes. The Examiners also conducted interviews with Company representatives and reviewed the Company's responses. In addition, all requests denied for medical necessity were reviewed by an independent clinical peer. The results are summarized in Section V below. Pre-Authorization
In response to the Examiners data requests, the Company provided the requested documentation and a population of 26 denied pre-authorization requests. The Examiners reviewed all 26 pre-authorization denials. UHC's pre-authorization files were reviewed to ensure compliance with Maine Mental Health Parity Laws as outlined in Rider A. Additionally, the Examiners reviewed the UHC's mental health pre-authorization processes in order to determine if the processes were equivalent to UHC's pre-authorization medical processes. The Examiners also conducted interviews with Company representatives and reviewed the Company's responses. In addition, all requests denied for medical necessity were reviewed by an independent clinical peer. The results are summarized in Section V below. Complaints, Appeals and Grievances Testing of this focus area commenced with the Examiners requesting separate populations of complaints, appeals and grievances from the records or logs maintained by the Company and which only involved behavioral health matters. The terms appeals and grievances are used interchangeably throughout this Report. The Examiners also requested the related policies and procedures the Company had in place for the Period. Information requested from the Company to conduct the review of these areas included: Complaints
In response to the Examiners' data request, the Company provided the requested documentation and a listing of only one (1) complaint received during the Period. The Examiners reviewed the one complaint identified by the Company. Also included in the scope of the Examination was testing of complaints to identify any matters related to pharmacy benefits. The Company had no pharmacy complaints for the Period. The results are summarized in Section V. Appeals and Grievances
In response to the Examiners' data requests, the Company provided the requested documentation and a listing of two (2) appeals (including administrative and clinical levels I and II). The Examiners reviewed both appeals. The Examiners reviewed UHC's mental health appeal procedures and related notices to determine whether they comply with Maine's requirements and whether the Company's procedures and notices for behavioral health appeals are equivalent to medical appeals procedures and notices. The Examiners also conducted interviews with Company representatives and reviewed the Company's responses. In addition, complaints and appeals relating to claims or requests for authorizations for services denied for medical necessity were reviewed by an independent clinical peer. The results are summarized in Section V below. Policyholder Services and Provider Network Testing of this focus area involved requesting information related to policyholder services and provider network and the policies and procedures applicable during the Period. The information requested included: Policyholder Services
Provider Network
To review and test the accuracy of a provider's network status on the date of service, the Examiners reviewed a random sample of 43 from the 130 denied and zero-paid claim sample and compared the network status on the date of service to the Company listing of providers contracted at any time during the Period. The Examiners also determined the Company's compliance with the state of Maine's mental health parity laws and other applicable rules and regulations. The results are summarized in Section V. As previously noted, in addition to reviewing the documentation and performing the testing discussed above, the Examiners also conducted interviews with Company representatives responsible for certain UHC functional areas, including claims, complaints, appeals, pre-authorizations, UR, policyholder services and provider network. SECTION V - RESULTS OF THE EXAMINATION The Examination identified nine (9) potential violations of Maine insurance laws involving two sections of the Maine Insurance Rule. The following summarizes the results of the Examination: Company Operations and Management No exceptions were noted. Claims Handling and Settlement The Examiners tested a sample of 130 denied and zero-paid claims and a population of 19 SID claims. The SID claims were not included with the UHC claim population but rather were provided as a separate file. Consequently, given the limited number of SID claims, the Examiners elected to review these in addition to the sample of 130 denied and zero-paid claims. Testing included assessing the Company's compliance with applicable Maine statutes in addition to testing the Company's general claim processing. Based on the review of the claim sample, the Examiners determined that during the Period, the Company did not impose any more restrictive filing requirements on providers who filed behavioral health related claims when compared to medical claim submissions. Testing identified potential violations regarding two (2) Maine statutes. The Maine statutes and the exceptions noted are as follows:
Please note that there were no errors identified from the review of the SID population of 19 claims. Utilization Review and Pre-Authorization Utilization Review The testing of the population of one UR claim that was denied included assessing the Company's compliance with applicable Maine statutes in addition to testing the Company's general processing of UR requests. Based upon the results of the Examiners' testing of the sample UR population, it was determined that UHC's UR processes for managing mental health benefits were equivalent to the Company's UR processes for managing medical benefits. No exceptions were noted. Additional Observations The Company had policies and procedures in place requiring that UR denials be made by a qualified peer. With respect to behavioral health issues, a qualified peer, depending upon the situation, is described by the Bureau in Rider A as one that is in the provider's discipline and is equally qualified as the provider ordering the treatment or service. This would include but not be limited to a mental health professional (e.g., psychologist, psychiatrist or psychiatric nurse practitioner) or physician (e.g., M.D., D.O.). As part of the Examiner's review and at the request of the Bureau, the Examiners referred certain files that the Company denied for medical necessity to an Independent Peer Reviewer. The Examiners identified one (1) UR file that was denied by the Company due to not meeting the medical necessity criteria as defined by the Company. Further, the claims were not overturned through the Company's appeal process. The complete files as provided by the Company were reviewed and referred for peer-to-peer review. No exceptions were noted. Pre-Authorization The testing of all 26 Pre-Authorization requests that were denied included assessing the Company's compliance with applicable Maine statutes in processing such requests, and testing the Company's policies and procedures. Based upon the results of the Examiners' testing of the sample pre-authorization population, it was determined that UHC's pre-authorization processes for managing mental health benefits were equivalent to the Company's pre-authorization processes for managing medical benefits. No exceptions were noted. Additional Observations The Company had policies and procedures in place requiring that Pre-Authorization denials be made by a qualified peer. With respect to behavioral health issues, a qualified peer, depending upon the situation, is described by the Bureau in Rider A as one that is in the provider's discipline and is equally qualified as the provider ordering the treatment or service. This would include but not be limited to a mental health professional (e.g., psychologist, psychiatrist or psychiatric nurse practitioner) or physician (e.g., M.D., D.O.). As part of the Examiner's review and at the request of the Bureau, the Examiners referred certain files that the Company denied for medical necessity to an Independent Peer Reviewer. The Examiners identified one (1) Pre-Authorization that was denied by the Company for not meeting the medical necessity criteria as defined by the Company, and not overturned through the Company's appeal process. The complete file provided by the Company was reviewed and referred for peer-to-peer review. The Independent Peer Reviewer agreed with the Company's decision. Complaints, Appeals and Grievance Handling Complaints The testing of one (1) complaint included assessing the Company's compliance with applicable Maine statutes and testing the Company's complaint handling procedures. No exceptions were noted. Pharmacy Complaints The Company did not have any pharmacy complaints. Appeals The testing of both appeals included assessing the Company's compliance with applicable Maine statutes and testing the Company's appeals processing procedures. UHC's appeal process for mental health claim denials was determined to be equivalent to the UHC's appeal process for medical claim denial appeals. Based upon the results of the Examiner's review of the Company's processes no exceptions were noted. Additional Observations As part of the Examiners' review and at the request of the Bureau, the Examiners referred certain files that the Company denied for medical necessity to an Independent Peer Reviewer. The Examiners identified one (1) appeal that was upheld by the Company for not meeting the medical necessity criteria as defined by the Company, and not overturned through the Company's further appeal rights. The complete file provided by the Company was reviewed and then referred for peer-to-peer review. The Independent Peer Reviewer agreed with the Company's decision. Policyholder Services and Provider Network Policyholder Services The testing of policyholder services involved assessing the Company's compliance with applicable Maine Statutes. The Company had separate policies, procedures and training on how to respond to behavioral health inquiries. No exceptions were noted. Provider Network The accuracy of a provider's network status on the date of service was tested through a review of 43 of the 130 denied and zero paid claim files. No exceptions were noted.
Addendum United HealthCare
December 2, 2010 Via Email & U.S. Mail Superintendent Mila Kofman Re: United HealthCare Insurance Company - United Behavioral Health Dear Superintendent Kofman: This is in response to the draft Market Conduct Examination Report issued by RSM McGladrey, Inc. on behalf of the Bureau of Insurance concerning compliance with Maine's mental health parity law and related laws. We appreciate the opportunity to review the Report and to recommend changes to it pursuant to 24-A M.R.S.A. § 226. RSM McGladrey identified (2) findings. United HealthCare Insurance Company recommends the following changes as described below. Finding # 1 The Examiners identified five (5) of 130 denied and zero-paid claims which was not paid within 30 days of receipt, representing a potential violation of Title 24-A Chapter 27 §2436(1) of the Maine Insurance Rule. Finding # 1: Recommended Change United HealthCare Insurance Company respectfully recommends that the above finding be revised to indicate that there was no violations of Maine's prompt payment law, 24-A M.R.S.A. § 2436, notwithstanding the late payment of claims because statutory interest was paid on each claim. (Specifically there is a note on page 20 in the draft report indicating "The Examiners confirmed the Company did pay the appropriate interest on the claims in question".) While the examiners correctly noted that claims must be processed within 30 days, Maine's prompt payment law also contemplates situations where claims are not paid within such a time period and imposes a resulting obligation to pay interest. United HealthCare Insurance Company contends that through the payment of interest on claims, a carrier ultimately meets the requirements of the law. Letter to Superintendent Kofman More specifically, the initial requirement to process claims within 30 days cannot be separated from the subsequent requirement to pay interest on late claims when considering compliance with the prompt payment law. The statute recognizes that there may be situations where a claim is not paid within 30 days and provides an internal remedy for such circumstances - an interest penalty. If a carrier was late in paying a claim and also failed to pay the statutorily mandated interest, there would then be a violation of the law. United Healthcare Insurance Company respectfully requests that the finding be revised to indicate that while there were five (5) late payments of claims, there was no violation of the law by virtue of the payment of the statutory interest. Finding #2 The Examiners identified four (4) of 130 denied and zero-paid claims, representing potential violations of Title 24-A Chapter 23 §2164-D(3) of the Maine Insurance Rule concerning Unfair Claims Practices. Specifically, one claim was paid as authorized for out-of-network, when no authorization was included in the file. Another claim was paid with an incorrect benefit amount of 70%, which was in conflict with the correct benefit amount of 50%. Finally, two claims were denied as not having authorizations when upon review, it was determined the file contained an open authorization certification. Finding #2: Recommended Change United Healthcare Insurance Company respectfully recommends that the above finding be revised to indicate that there was no violation of Maine's unfair claims practices law, 24-A M.R.S.A. 2164-D (3). As the examiners have noted, there were four (4) claims processed incorrectly out of the sample population. The four (4) claims were processed incorrectly due to human error. Under the law, there must be a violation of both subsections 2 and 3. Subsection 2 states that an insurer has committed an unfair claims practice if the act listed in subsection 3 has been committed either in conscious disregard of the statute and any rules under the statute or has been committed with such frequency to indicate a general business practice to engage in that type of practice. Subsection 3 enumerates several unfair claims practices, such as committing knowing misrepresentations or refusing to pay claims without a reasonable investigation. Based on the facts outlined above, there was neither a conscious disregard of the law nor a frequency of conduct that would indicate a "general business practice." The isolated nature of these claims mistakes is manifested by the error percentage rate of 3.1% of the overall total claims sample. These actions occurred as a result of inadvertent errors. Letter to Superintendent Kofman
In summary, United Healthcare Insurance Company appreciates the opportunity to provide recommendations. Please do not hesitate to contact me with any questions or comments regarding this response.
Respectfully Submitted,
Last Updated: August 22, 2012 |
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