Insurance regulators in North Carolina fined UnitedHealthcare $3.4 million after a multiyear investigation alleged dozens of instances when the insurer might have let patients wrongly face excessive bills from out-of-network health care providers.

The North Carolina Department of Insurance says insurers in the state are supposed to protect patients from “balance billing” where out-of-network health care providers ask patients to pay the difference when insurance companies pay less than the provider’s charges for medical services.

The four-year investigation found that UnitedHealthcare allegedly did not follow its own procedures to make sure patients receiving anesthesia, emergency and laboratory services were held harmless in these instances.

In addition, regulators alleged violations of North Carolina law on claims processing as well as a statute on handling patient grievances when people covered by UnitedHealthcare objected to the insurer’s determination that they should pay higher out-of-network fees.

UnitedHealthcare did not admit findings in a regulatory report released this month by North Carolina regulators, or agree the company violated any laws, regulations or rules, according to a voluntary agreement in the case.

Even so, company officials signed the settlement to resolve disputed claims and agreed to provide regulators with a corrective action plan and submit to future compliance examinations.

“Patients receiving emergency room services certainly don’t have the time or capacity to go through a checklist and make sure all providers attending them are in-network,” Mike Causey, the North Carolina insurance commissioner, said in a statement.

“UnitedHealthcare’s practices potentially put unnecessary financial burdens on many North Carolinians,” Causey said. “I am happy to see that UnitedHealthcare has agreed to take corrective actions.”

In a statement, UnitedHealthcare said it continues to comply with all state and federal laws, including the federal “No Surprises Act,” which protects patients from balance billing.

“We are committed to protecting our members from out-of-network care providers who bill excessive fees, particularly in acute or urgent settings,” the company said.

UnitedHealthcare is the health insurance division of Eden Prairie-based UnitedHealth Group, Minnesota’s largest company by revenue. UnitedHealth Group is one of the biggest companies in the country, with about 400,000 workers overall, including about 19,000 in Minnesota.

At the end of December, about 49.3 million people in the U.S. had coverage from UnitedHealthcare.

Since 2018, the company has faced fines and scrutiny from insurance regulators in Minnesota, Pennsylvania and New Jersey. Earlier this month, UnitedHealth Group said it would pay at least $20.25 million to settle a U.S. Department of Labor lawsuit that alleged a company division wrongly denied thousands of claims to pay health care providers for emergency room services and urinary drug screenings.

Allegations in the North Carolina case focused on UnitedHealthcare’s fully insured health plans and practices pertaining to health care provider “networks.” These are important features of health insurance coverage where patients typically face lower out-of-pocket costs if they get care from doctors and hospitals that agree to treat patents for the insurer’s lower “in-network” reimbursement rates.

Regulators say they launched what’s called a “market conduct examination” in June 2020 after seeing a significant increase in consumer complaints related to coverage of anesthesia and emergency room services from out-of-network providers and facilities in North Carolina.

Consumer-protection statutes in the state say insurers must have an adequate network of health care providers, according to the insurance department.

Where in-network providers aren’t available, patients should not face financial penalties from insurer for receiving out-of-network care, regulators say. Similar protections apply when patients receive out-of-network emergency services “because either a prudent layperson acting reasonably would have believed the a delay [to find an in-network ER] would have worsened the emergency, or the choice of a provider was beyond the control of the covered person,” according to the regulatory report.

The report focused on patients, or “members,” with UnitedHealthcare coverage at one of two company subsidiaries doing business in North Carolina. The examination was not comprehensive, regulators say, and included reviews for a subset of member grievances and claims processed between Jan. 1, 2019, through May 31, 2020.

During the time period, UnitedHealthcare received a total of 1,978 member grievance review requests. Regulators looked at a random sample of 100 cases and found 41 instances where UnitedHealthcare upheld initial decisions that allegedly were incorrect and where the insurance department found no evidence the company tried to intervene on behalf of patients facing balance bills.

A number of these patients wrongly received letters from the insurer telling them they were responsible for all costs related to the service, regulators say. The insurer’s “explanation of benefit” forms wrongly told some patients: “You may be responsible for paying the difference between what the facility or provider billed and what was paid for,” according to the regulatory report.

After reviewing a sample of 100 claims processed, regulators alleged a number of problems including instances where UnitedHealthcare misstated pertinent facts or insurance policy provisions related to coverage.

The company failed to process claims for out-of-network anesthesia and lab services provided at in-network facilities so that patients weren’t penalized, regulators say. And they alleged UnitedHealthcare imposed cost-sharing fees for out-of-network emergency services that differed from the cost-sharing for in-network emergency services, resulting in “actual or potential balance-billing liability” for patients.

Across the samples of 100 grievances and 100 claims processed, regulators found patients faced potential or actual “unresolved exposure” of $336,793. It wasn’t clear if patients in all cases followed the allegedly incorrect guidance from UnitedHealthcare and paid these bills.

But regulators say they documented 10 instances where patients who filed grievances ended up paying a collective $26,543 after UnitedHealthcare wrongly rejected their arguments. And allegedly incorrect claims processing by the company resulted in clear evidence, regulators say, of patients wrongly paying $17,779.

“Members were being subjected to cost sharing in excess of applicable deductible, copayment and coinsurance liabilities for certain services and balance billing from providers,” the report says.

“These medically necessary services were mainly provided by out-of-network anesthesiology providers, laboratory providers and emergency room departments,” regulators said. “The anesthesia and laboratory services were performed in conjunction with procedures and services provided at in-network facilities where a member received services from an out-of-network provider. The companies' failure to have in-network anesthesiology and laboratory providers available at in-network facilities should not affect the member’s benefit levels or cost-sharing responsibilities for covered services.”