A Southwestern state has imposed a fine on one of the state’s largest providers of health coverage.

The Arizona Department of Insurance says it has imposed $364,750 in fines on United HealthCare of Arizona Inc. and United HealthCare Insurance Company, 2 units of UnitedHealth Group Inc., Minnetonka, Minn.

United HealthCare is a health maintenance organization and United HealthCare Insurance sells indemnity insurance and preferred provider organization coverage.

Both units violated state laws governing member appeals, provider payment times, provider grievances, and recordkeeping, according to the Arizona department.

The HMO unit also improperly denied physician claims for certain services the physicians provided to members in network hospitals, officials say.

“Both United HealthCare companies have adopted corrective action programs to modify their operations,” officials say.

UnitedHealth says the fines are the result of a market conduct exam that ended about 3 years ago.

“The exam findings were based primarily on the review of what were cited as incomplete records,” UnitedHealth says in a statement. “A number of violations were related to administrative issues that were corrected immediately. Further, we have implemented new systems that improve our claims-processing and appeals efficiency and accuracy by automating the organization and workflow of the claims process.”

The United HealthCare operations in Arizona now have the lowest member-complaint ratio in Arizona, and the average claims-payment turnaround time is 3.6 days, the company says.

“We embrace the concept of the market conduct exam and its purpose, and as a result of the findings have implemented new systems and processes to better serve our members and contracted physicians and hospitals,” UnitedHealth says.