Insurance Commissioner Wayne Goodwin today announced a settlement with CIGNA Healthcare of North Carolina, Inc. over violations discovered during a routine market conduct examination. The settlement resulted in a fine of $600,000 on top of the refund of $638,000 to policyholders (individuals and businesses). As required by state law, the monetary penalty component collected will be distributed to the state public school system.
During CIGNA's market conduct examination that began in September 2005 and covered the period of 2002 through 2004, the Department of Insurance found a variety of violations including, but not limited to:
•widespread failure to maintain adequate records in numerous areas of review;In addition to the $600,000 fine, refunds and credits totaling $637,974.98 were issued to affected employer group policyholders due to the company's failure to accurately and consistently calculate premium rates. Undercharges in excess of $1.3 million that occurred during the same time period as the overcharges were factored in when determining the credits and refunds.
•failure to accurately and consistently calculate premium rates in accordance with rating methodology filed with and approved by the Department;
•failure to timely process precertification requests;
•failure to provide proof of the required provisions for written noncertification notifications including instructions regarding members' rights to external review, retrospective reviews and authorizations to providers;
•failure to require verification of all provider credentials;
•failure to properly process claims resulting in incorrect payments or improper denials;
•failure to process claims timely; failure to send acknowledgment letters within three business days for member grievances and failure to include all required statutory provisions within acknowledgment and decision letters;
•failure to provide written notification of decisions for member grievances within 30 days of receipt;
•failure to submit accurate filings certifying compliance with North Carolina advertising laws;
•failure to sufficiently monitor the activities of delegated entities; and
•failure to obtain Department approval prior to executing intermediary agreements.
"My team and I take the job of consumer protection very seriously," said Insurance Commissioner Goodwin. "When I do my job, consumers are better protected, people and Tar Heel businesses save lots of money, firefighters have a fierce advocate, and we are better able to attract lots of jobs," said Insurance Commissioner Wayne Goodwin. ... And in this instance, our Department of Insurance team also greaty benefited North Carolina's public schools."
Refunds were issued in August 2010; however CIGNA was unable to reach some of the affected employer groups. To see a list of companies still owed a refund, visit CIGNA's website by clicking on this link, or call CIGNA at 704-540-3021 for more information.
Cigna Healthcare of North Carolina, Inc Premium Reimbursements 2002 Through 2004
To date, since January 2009 when Goodwin took the oath of office, North Carolina consumers - individuals, families and businesses - have saved through refunds, rebates, credits, restitution, recoveries, and penalties more than $950 MILLION.