Pennsylvania Enforcement

Pennsylvania – State fines UPMC Health Plans $250,000 for Parity and Affordable Care Act Violations (December 2021) 

The Pennsylvania Department of Insurance (DOI) fined UPMC Health Coverage, Inc. and UPMC Health Options, Inc. $250,000 stemming from a comprehensive Parity and Affordable Care Act market conduct examination.   

As highlighted in a December 30, 2021 press release, the corrective action and fine was a result of DOI’s review of insurer’s operations in PA between January 2015 and March 2016.  The market conduct exam report can be viewed online here.  

The DOI audit identified several mental health parity violations involving both quantitative treatment limitations (QTLs) and nonquantitative Treatment Limitation (NQTLs), including: 1) parity compliance analyses that were not available; and 2) the incorrect application of QTLs and NQTLs.  

For example, UPMC imposed a NQTL with respect to autism benefits for certain outpatient and in-network classifications that limited the scope and duration of treatment for members by partially denying requested hours of community-based wrap-around services.  The health insurer failed to demonstrate that the same processes, strategies, evidentiary standards, or other factors used in applying these partial denials to the specific autism services also were applied comparably and no more stringently in respect to the medical/surgical benefits in the same classifications.  The state auditors also found a similar problem with how UPMC applied SUD benefits in various classification benefits in the context of prior authorization requirements. 

Auditors also identified claims processing violations, including claims being denied when they should have been paid and unacceptable processing delays. The examination also uncovered Unfair Insurance Practices Act violations relating to: 1) ambiguous communications; 2) prompt pay and interest violations; and 3) maximum-out-of-pocket miscalculations.  

As a result, the DOI ordered UPMC to take corrective action to address the violations.  The company must review and revise internal control procedures to ensure compliance with the MH/SUD requirements of the Federal Parity Law.  All parity analyses must be documented to demonstrate that QTLs and NQTLs imposed with respect to MH/SUD benefits are determined to be compliant with parity requirements before selling UPMC markets its insurance policies.   

In addition, UPMC must 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.  

Pennsylvania – State Assesses $1.8 Million in Payments Associated with United Healthcare Parity Violations (November 2019)

The Pennsylvania Insurance Dept. officials announced in early Nov. 2019 a $1 million fine against United Healthcare. Based on violations of the Federal Parity Law and other violations contained in the report, UnitedHealthcare has agreed to pay restitution to consumers from claims wrongly denied, overpaid out-of-pocket expenses, and interest on delayed claims. The plan also has agreed to develop an $800,000 public outreach campaign to educate consumers about their mental health and substance use disorder benefits.

To view the Pennsylvania Insurance Department press release, click here.  The Market Conduct Exam Report can be viewed online here.

The report, which covers the period from January 2015 through March 2016, found extensive noncompliance with mental health parity and prompt pay laws, as well as concerns with the company’s coverage for services relating to autism spectrum disorders and substance use disorders. The examination also covered company operations, handling of consumer complaints, and policyholder services.

Market conduct results and recommendations include:

• Review and revision of internal control procedures to ensure compliance with the mental health and SUD parity compliance requirements including:
  • Evaluate QTL analyses and ensure that each QTL for mental health or SUD benefits in each classification is not more restrictive than the predominant financial requirement or treatment limitation of that type applied to substantially all medical/surgical benefits in the same classification
  • Evaluate NQTL analyses and ensure that for each NQTL for mental health or SUD benefits in each classification, the processes, strategies, evidentiary standards, or other factors used in applying that limitation to mental health or SUD benefits within that classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards or other factors used in applying the limitation to medical/surgical benefits in the classification
  • Reprocess claims for all Pennsylvania members that may have been impacted to determine if restitution, including interest, is due.
• Revision of its procedures to ensure that initial internal complaint review processes are completed within 30 days of the receipt of a complaint – along with revision of other internal complaint processes to comply with state law
• Ensuring that all clean claims including autism spectrum disorders (ASD) diagnostic and treatment claims are paid within 45 days of receipt
• Ensuring that applicable interest is paid to any unpaid claims identified in the Examination Report
• Improvement of complaint processes to ensure compliance with state law regarding the complaint appeal processing and acknowledgement notifications.
• Revision of internal control procedures to ensure compliance with the claims handling requirements including:
  • Conducting a reasonable investigation based on all available information for claim processing
  • Affirming or denying coverage within 45 days after proof of loss for the claims received
  • Providing Prompt, fair and equitable settlements are being provided to the claimants
  • Providing an explanation of benefits that properly represents the activity of the claim after sending a letter requesting information to the subscriber
  • Providing a reasonable explanation  in the insurance policy in relation to the facts or applicable law for the denial of a claim or for the offer of a compromise settlement.
• Revision of its processes to ensure compliance with state and federal law regarding Essential Health Benefits and cost-sharing requirements.

Pennsylvania – State fines Aetna, Inc. $190,000 for Parity Violations (January 2019)

The Pennsylvania Department of Insurance fined Aetna $190,000 for violating rules on coverage of drug and alcohol abuse treatment and autism.  The market conduct exam report can be viewed online here.

The corrective action and fine was a result of DOI’s review of insurer’s operations in PA between January 2015 and March 2016.  Specific violations included: incorrect application of copays, coinsurance, and visit limits, as well as violations involving prior authorization for treatment and step therapy