A 37-jurisdiction settlement agreement may free a large managed care company from the traditional state-by-state market examination process.

The UnitedHealthcare insurance and managed care units of UnitedHealth Group Inc., Minnetonka, Minn., have agreed to pay $12 million up front to resolve regulators’ concerns about claims practices involving matters such as coordination of benefits, appeals and grievances, explanations of benefits, and utilization review.

UnitedHealth’s health coverage units also has agreed to meet new performance standards over the next 3 years, and it has agreed to pay up to $20 million in additional penalties if it fails to meet the new standards, the company says.

Regulators in many states were looking into complaints about the UnitedHealth units’ claims-paying practices a few years back.

In December 2006, Iowa Insurance Commissioner Susan Voss worked through the National Association of Insurance Commissioners, Kansas City, Mo., to negotiate a multistate settlement agreement draft.

The proposal called for the agreement to take effect if at least 30 states signed the agreement by Aug. 27, 2007.

Today, 36 states and the District of Columbia have signed the agreement, Iowa officials say.

Arkansas, Connecticut, Florida, Iowa and New York are the “lead states.”

Iowa will be the lead state for purposes of examination and statutory requirements and will serve as the repository of all documents, officials say.

“Moving forward, the participating states will coordinate routine regulatory oversight but will forego traditional market examinations,” UnitedHealth says in a description of the new regulatory program. “Instead, UnitedHealthcare will self-report quarterly and annually how it performs on a set of national performance standards.”

Individual states still have the authority to investigate consumer and provider complaints, according to the text of the settlement agreement.

The new regulatory arrangement “breaks new ground in how we can work with states across the country,” Kenneth Burdick, chief executive officer of UnitedHealthcare, says in a statement about the settlement agreement.