The North Carolina Department of Insurance (NCDOI) has issued a significant market conduct examination report highlighting insurance compliance concerns in UnitedHealthcare's handling of balance billing and network adequacy. This case offers important lessons for compliance professionals across the insurance industry.
Examination Scope and Findings
The examination, covering January 2019 through May 2020 with analysis extending through December 2021, focused on two key areas:
* Member grievances
* Claims processing for out-of-network services
Notably, the examination applied strict standards, with a zero-tolerance threshold for grievance handling and a 7% tolerance level for claims processing.
Key Compliance Issues
Network Adequacy:
The examination revealed laboratory services failed to meet access requirements in 37% of North Carolina counties, with some areas showing access rates as low as 40%. This systematic failure raised significant regulatory concerns.
Member Impact:
Financial exposure to members was substantial:
* $26,543.47 in unresolved member exposure from grievance files
* $207,191.03 in potential exposure identified in claims review
Regulatory Framework
Two critical North Carolina statutes formed the basis for many findings:
1. N.C.G.S. § 58-3-200(d): Prohibits penalizing members with out-of-network charges when in-network providers aren't reasonably available.
2. N.C.G.S. § 58-3-190: Protects members from excess cost-sharing for emergency services.
Required Corrective Actions
The settlement requires UnitedHealthcare to:
* Submit a comprehensive corrective action plan
* Revise balance billing protection procedures
* Update policy documents for regulatory compliance
* Participate in future compliance examinations
Compliance Lessons
This examination highlights several critical areas for compliance professionals:
1. Documentation Importance: The examination relied heavily on UnitedHealthcare's own documentation, including their Weekly Network Adequacy Report.
2. Systemic Review: Examiners identified patterns of non-compliance across multiple operational areas.
3. Member Communication: Policy language inconsistent with regulatory requirements created additional compliance issues.
4. Financial Impact: The total financial impact extends beyond the $3.4M fine, including required operational changes and potential reprocessing of claims.
Looking Forward
This examination demonstrates the ongoing regulatory focus on network adequacy and member protection issues. Insurance compliance professionals should consider:
* Reviewing current network adequacy monitoring processes
* Auditing grievance handling procedures
* Assessing balance billing protection measures
* Evaluating policy language for regulatory alignment
[Note: This article is intended for informational purposes only and does not constitute legal advice. Companies should consult with their legal counsel regarding specific compliance requirements.]
