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Rhode Island Fines United Over Denials

MANAGED CARE July 1998. © MediMedia USA
State Initiatives

Rhode Island Fines United Over Denials

MANAGED CARE July 1998. ©1998 Stezzi Communications

The wave of managed care consumer protection enforcement hit the Ocean State last month. Rhode Island authorities fined United HealthCare of New England $50,000, alleging that the Warwick, R.I., HMO violated state law in some cases where payments for medications and emergency care were denied.

The state cited United's use of Diversified Pharmaceutical Services, which manages its formulary and, until recently, decided whether off-formulary prescriptions would be covered. Rhode Island law requires state certification — which DPS lacked — for companies performing utilization review.

In addition to paying the fine, United agreed to stop using DPS to rule on medical necessity. It also will suspend reviews of emergency services until it submits a plan for complying with state regulations. Rhode Island allows an HMO to deny emergency care only after one of the plan's physicians consults with the attending physician.

United HealthCare of New England has 232,000 enrollees in Rhode Island and Massachusetts. The company maintained that problems were the result of miscommunication.