As part of the settlement, the division also agreed to implement a three-year "process improvement" plan requiring it to submit quarterly reports and meet annual benchmarks toward reducing claims-payment errors, speeding payments and handling complaints and appeals better. If these aren't met, the company could pay as much as $20 million more in fines.
Discussion and negotiations for a joint settlement with state regulators and the health insurance giant began in 2005 but say the company pursued talks more vigorously after an options-backdating scandal led to a management shakeup at UnitedHealth late last year.
The agreement breaks new ground in the health insurance industry, said Kenneth Burdick, chief executive of the United Healthcare division, in that it "establishes an efficient, transparent framework for working collaboratively with states using objective performance measurement standards." Regulators say the joint settlement talks began after several states said they saw an unusual number of problems at UnitedHealth in resolving complaints or problems that regulators had brought to its attention.