Maryland insurance regulators fined UnitedHealthcare of the Mid-Atlantic and its MAMSI subsidiaries $633,000 and ordered them to pay nearly $930,000 in restitution to hospitals and radiology companies for using non-compliant utilization review procedures.

The Maryland Insurance Administration investigation into the procedures led to a UnitedHealthcare self-audit, which found more than 300 cases of improper reimbursements.

The companies involved include MD-Individual Practice Association, MAMSI Life and Health Insurance Co., Optimum Choice, and UnitedHealthcare Insurance Co. MAMSI and its health plans, which serve Maryland, Virginia and Washington, D.C., became subsidiaries of UnitedHealthcare in February 2004, after a $2.7 billion merger.

Two of the Rockville, Md.-based health insurers’ programs – the Hospital Notification Program and Radiology Notification Program – are supposed to alert the company when doctors recommended the health insurers’ members receive elective hospital care or radiology services, according to the MIA.

“These programs did not meet all the requirements of Maryland law for utilization review programs and thereby placed inappropriate demands on hospitals and physicians referring patients for radiology services,” the MIA said in a statement.

UnitedHealthcare’s self-audit found 85 cases of inappropriate payment denials with its hospital program, leading to the denial of $756,130 in charges. The hospitals have been reimbursed for these cases, the MIA said.

The radiology program failed to properly pay in 227 cases, leading to the denial of $172,599 in charges to hospitals and radiology service providers, which have since been paid.

The MIA assessed $613,000 in fines for these errors.

“UnitedHealthcare is committed to making the notification process for elective hospital care or radiology services as easy as possible for care providers and patients,” according to a statement from Daryl Richard, vice president of public relations for UnitedHealthcare. “We are pleased to have entered into this voluntary settlement with the Maryland Insurance Administration regarding these two notification programs and are confident that the changes being made will ensure that members receive better coordinated care and that their benefits are applied correctly.”

Ralph S. Tyler, Maryland’s insurance commissioner, said in a statement the insurer’s “full cooperation” helped the MIA identify errors. “The lessons the MIA learned from this investigation will enable us to more fully leverage our strengths to protect consumers,” Tyler added.

In a separate MIA case involving a UnitedHealthcare company, United Behavioral Health of Minneapolis, Minn., agreed to pay a $20,000 fine for inappropriately requiring some providers to submit a Wellness Assessment Form for behavioral health care services reviewed by the company. Maryland law requires use of a uniform treatment form and prohibits providers from requiring additional forms.