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Re: Unreasonable delay in payment of a claim

Dear Mr. or Ms. Compliance Officer:

Please accept this as a formal Letter of Reprimand from the Superintendent of the Maine Bureau of Insurance. The purpose of the letter is to address unreasonable delay in payment of a claim.

FACTS

1. The Bureau received a complaint from Consumer on August 26, 2002, complaint #2002-11433, regarding United Healthcare’s denial of a $6,245.00 claim for a pump to treat Lymphedema. Consumer paid for the pump and submitted a claim for reimbursement to United Healthcare dated March 13, 2000. The claim form Consumer submitted included the name and address of the durable medical equipment (DME) provider. United Healthcare received the claim on April 8, 2000, conducted a medical review and the pump was determined to meet United Healthcare’s medical necessity requirements. Consumer asserted that she contacted United Healthcare multiple times attempting to resolve this claim.

2. United Healthcare sent consumer an Explanation of Benefits on May 11, 2000 denying the claim with the notation ES, “No benefits are payable for this expense. Benefits are provided for services determined to be covered health services. Based on the information provided, this service does not meet the coverage requirements.” In response to the Consumer’s complaint to the Bureau, United Healthcare has advised that the reason for the denial was that the consumer had not provided required information on the durable medical equipment provider, specifically the DME provider’s tax ID number.

3. Consumer sent United Healthcare a letter on June 10, 2000 explaining why it was necessary to have the durable medical equipment.

4. United Healthcare sent Consumer an Explanation of Benefits on October 10, 2000 denying the claim with the notation LG, “Please submit an itemized bill with the provider’s full name, address, telephone number and tax identification number,” and the notation QN, “Your claim may have been separated for processing purposes; any additional charges will be processed as soon as possible.”

5. Consumer sent United Healthcare a letter dated March 27, 2002, providing the name, address and telephone number of Consumer’s doctor, and enclosing records from the hospital where the durable medical equipment was obtained.

6. United Healthcare sent Consumer and Explanation of Benefits on May 29, 2001 denying the claim with the notation 91A, “in order to process this claim we need the provider's complete mailing address, tax ID number and phone numbers. We also need to know if this item was purchased twice as indicated or just once. Please provide us with this information."

7. Consumer provided the Bureau with a copy of a letter dated June 8, 2001 that Consumer asserts she sent to United Healthcare stating that there was only one pump purchased and providing the address, phone number and tax ID information for the DME provider. In response to Consumer’s complaint, United Healthcare has advised the Bureau that it did not receive Consumer’s letter.

8. In response to the complaint Consumer filed with the Bureau, United Healthcare paid the $6,245.00 claim, with interest in the amount of $3,243.34. United Healthcare’s October 8, 2002 letter to the Bureau stated, in part: “… as stated in the previous letter, we did not receive any information regarding the supplier’s information … which was requested by United Healthcare Insurance Company. The letter enclosed was never received in our offices as well, which explains the continued denial of this claim. On the date the original [] complaint file was received, we made an exception to process this claim without the information requested to benefit our customer due to the escalation and frustration this matter had caused, not due to the intervention of the Maine Department of Insurance. United Healthcare mailed to our customer two different requests for this information, and do not have any records reflecting the response regarding…the information."

BUREAU’S FINDINGS

9. The Consumer met her obligation under the Policy by providing United Healthcare with the name and address of the DME provider. United Healthcare's delay in reimbursing Consumer for out-of-pocket expenses was not warranted. If United Healthcare needed the DME provider’s tax ID, it could have requested that information from the DME provider.

10. United Healthcare Insurance Company is a Maine licensed insurer as of October 25, 1972, license number LHF 700, and the Superintendent is the official charged with administering and enforcing Maine’s insurance laws and regulations. Title 24-A M.R.S.A. § 12-A provides that the Superintendent may issue a Letter of Reprimand to any licensee after providing an opportunity for a hearing. In accordance with 24-A M.R.S.A. §229(3), you have 30 days from the time you receive this Letter of Reprimand to request a hearing. If a hearing is requested the effective date of this Letter of Reprimand will be suspended pending the hearing. This Letter of Reprimand is a public record within the meaning of 1 M.R.S.A. § 402 and will be available for public inspection and copying as provided for by 1 M.R.S.A. § 408. It will be reported to the NAIC and included in the RIRS database. Nothing herein shall prohibit the Superintendent from seeking additional sanctions in the event that additional violations are brought to the attention of the Bureau.

Dated: _______________________

ALESSANDRO A. IUPPA
Superintendent of Insurance

By his designee:

_________________________________
Eric A. Cioppa
Deputy Superintendent of Insurance

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