Insurance Department Exam Finds UPMC Violations

Insurance Commissioner Jessica Altman announced a $250,000 penalty stemming from a comprehensive Affordable Care Act market conduct examination that the Pennsylvania Insurance Department (PID) conducted on the practices and procedures of UPMC Health Coverage, Inc. and UPMC Health Options, Inc.

The UPMC examination, which covers the period from Jan. 1, 2015, to March 31, 2016, identified claims processing violations, including claims being denied when they should have been paid and notification and processing delays. The examination also reported Unfair Insurance Practices Act violations relating to unclear communications, as well as prompt pay and interest violations, and maximum-out-of-pocket miscalculations. In addition, the examination reported mental health parity violations, as complete and timely quantitative and nonquantitative Treatment Limitation (QTL and NQTL) analyses were not available, nor were QTLs and NQTLs applied correctly.

“Protecting consumers and holding businesses to the highest standards remains the Insurance Department’s top priority,” said Altman. “We work to ensure that consumers are afforded all the rights and protections guaranteed to them by Pennsylvania law, and these market conduct examinations are a useful tool in that effort. UPMC has been extremely cooperative and thorough in its response to examiner findings.”

The Insurance Department is charged with upholding fair business practice standards for consumers, companies, and insurance professionals. This work involves researching and resolving complaints from consumers, investigating allegations of misconduct from insurance companies, agents, brokers, and others, and ensuring that practicing professionals are properly licensed.

The department has ordered UPMC to take corrective action to address the violations. Claims that were incorrectly processed under the prompt pay law must be reprocessed and accurately paid with applicable interest. The company must also adjust internal controls to address timeliness and communications in complaint processing; accuracy and clarity in member communications; and oversight of producer appointments and terminations. UPMC must also reprocess all claims for which incorrect cost-sharing was applied, and proof of payment, including applicable interest, must be provided to PID.

Finally, UPMC must enact enhanced processes and system improvements for maximum-out-of-pocket calculations. The Insurance Department may verify that these corrective actions have taken place through a reexamination process in the future.

The UPMC ACA examination was the fifth completed by the department. The other companies issued consent orders were:

•  Blue Cross of Northeastern Pennsylvania into Highmark, Inc.

• Aetna Inc.

• UnitedHealthcare Insurance Company

• Independence Health Group

A full copy of the UPMC Health Coverage, Inc. and UPMC Health Options, Inc. examination report may be found at https://www.media.pa.gov/Pages/Insurance-Details.aspx?newsid=468