The New York State Department of Health has ordered UnitedHealthcare to stop selling new managed care policies in the state through 2 of its smaller units.

UnitedHealthcare, the main health insurance unit of UnitedHealth Group Inc., Minnetonka, Minn., has failed to correct violations of state regulations governing financial reporting and wrongly denied payment of medical bills submitted by providers, the state health department charges.

UnitedHealth, the parent of Oxford Health Plans and AmeriChoice as well as of UnitedHealthcare, has responded with a statement emphasizing the narrow scope of the state health department order.

“The enrollment ban by the New York State Department of Health only applies to a small portion of the UnitedHealthcare HMO Medicaid product and to United Healthcare commercial HMO products with about 3,000 members,” UnitedHealth says in the statement.

“UnitedHealthcare and its subsidiary, Oxford Health Plans, continue to enroll membership in New York state products written on their insurance licenses, in addition to enrolling members on the Oxford Health Plans health maintenance organization license and AmeriChoice’s HMO license,” UnitedHealth says.

UnitedHealth has been shifting most of its New York members into plans that operate under the Oxford brand name, a UnitedHealth spokeswoman says.

In a letter to Michael Turpin, chief executive of UnitedHealthcare Northeast, Kathleen Shure, director of the health department’s Office of Managed Care, said the department was taking action because UnitedHealthcare had not adequately resolved alleged deficiencies with the products affected by the order.

Shure told Turpin the ban would be lifted in 120 days if the company demonstrates compliance.

Among other things, UnitedHealthcare must show that all HMO contracts sold in the state comply with departmental rules, train customer service representatives in proper handling of consumer inquiries and develop policies and procedures to assure that each customer complaint is investigated and responded to properly, Shure wrote.

The company must also submit “an accurate and complete” financial report for the second quarter by Aug. 15, Shure wrote.

Turpin says in the UnitedHealth statement that he and UnitedHealth are taking Shure’s concerns “very seriously.”

“We are striving to be the best health and well being company in New York, and will absolutely focus on any area requiring us to improve our performance,” Turpin says.

UnitedHealth is working closely with the state health department to address officials’ concerns in a timely fashion, Turpin says.

Additional material was added to this report by Allison Bell.