RALEIGH – North Carolina Insurance Commissioner Mike Causey has fined UnitedHealthcare of North Carolina Inc. and its affiliate UnitedHealthcare Insurance Co. $3.4 million following a multi-year investigation into the companies’ claims handling practices related to balance billing.
The investigation, which spanned more than four years, examined UnitedHealthcare’s handling of member grievances and claims involving non-contracted or out-of-network providers, particularly in anesthesia and emergency room services. State regulators sought to determine whether the company was following its own procedures to protect members from balance billing and complying with North Carolina law.
Balance billing occurs when an out-of-network provider charges more than the insurer’s allowed amount for an in-network service, with the excess cost passed on to the patient. The investigation found instances where UnitedHealthcare did not follow its own procedures to negotiate with providers and ensure members were not financially burdened by these charges.
“Patients receiving emergency room services certainly don’t have the time or capacity to go through a checklist and make sure all providers attending them are in-network,” said Commissioner Causey. “UnitedHealthcare’s practices potentially put unnecessary financial burdens on many North Carolinians. I am happy to see that UnitedHealthcare has agreed to take corrective action.”
As part of the settlement, UnitedHealthcare has agreed to implement a corrective action plan to address violations and undergo future compliance examinations. While the company accepted the final report and settlement, it denied any wrongdoing and did not admit to the findings in the investigation.
The $3.4 million fine will be allocated to public schools, as required under the North Carolina Constitution.
The Department of Insurance’s Market Regulation Division launched the investigation after noticing a sustained pattern of complaints from UnitedHealthcare members and providers. Many complaints involved unexpected cost-sharing charges for services such as out-of-network anesthesia, laboratory work, and emergency room care, often performed at in-network facilities.
According to state law, insurers cannot subject members to out-of-network costs if in-network providers were not reasonably available. Additionally, insurers cannot impose higher cost-sharing for emergency services if a patient reasonably believed a delay would worsen their condition or if provider selection was beyond their control.
The report also found that when members filed grievances over these charges, UnitedHealthcare often upheld its initial decision without clear efforts to advocate on behalf of the patient. In some cases, patients received response letters stating, “You are responsible for all costs related to this service” or “You may be responsible for paying the difference between what the facility or provider billed and what was paid.”
The Department of Insurance will continue monitoring compliance to ensure corrective measures are implemented.
