United settles suit with Nebraska over complaint procedure

Experts say the case highlights the tension between insurers wanting to centralize grievance operations and states, doctors and patients wanting them handled locally.

By Pamela Lewis Dolan, AMNews staff. June 11, 2007.

UnitedHealth Group agreed to a $650,000 settlement with the Nebraska Dept. of Insurance, thought to be the largest settlement in the department's history.

Experts say that although the fine is significant, more significant is the strong message to insurers that if they want to enter the local markets, they have to play by local rules.

The settlement resolves charges that the insurer violated several state insurance laws relating primarily to grievances and claims payments. The company has denied the charges and did not have to admit guilt in the settlement.

In addition to the $650,000 fine, the Nebraska Dept. of Insurance also mandated that United have representatives located within the state to handle local grievances as opposed to a centralized, national department to handle them. The insurance department also will conduct quarterly reviews of the grievance process as part of the settlement.

"This settlement resolves some historical issues that resulted from market conduct exams and complaints from several years ago that we felt were important to address," said Tim Wagner, director of the Nebraska Dept. of Insurance, in a prepared statement.

United is the second largest insurer in Nebraska, as well in the country, based on number of members.

The charges, filed December 2006, stemmed from a market conduct exam by the Dept. of Insurance from July 1, 2003, to June 30, 2004, after several consumer complaints were filed against the insurer.