California Fines UnitedHealth $3.5 million

by mega » Wed Jan 30, 2008 02:19 pm
Posts: 118
Joined: 23 Jan 2008

And slaps record sanctions on the company for problems handling claims.

MINNEAPOLIS — California slapped record sanctions on UnitedHealth Group Inc. on Tuesday for problems handling insurance claims, even though the giant health insurer protested that it had taken major steps in the past few months to clean up its act.

The California Department of Managed Health Care said it will fine a subsidiary of Minnetonka, Minn.-based UnitedHealth $3.5 million, the department's largest fine ever.

More alarmingly, the California Department of Insurance, which also regulates health insurers, said it found more than 130,000 violations of state rules on health claims that could result in fines as high as $1.3 billion.



So according to this looks like there may be some even larger fines coming on some violations of state rules on health claims. You can't help but wonder how many policy holders this involves and how much money this all has cost them.

Anyone here been directly affect by all this in California and with this insurance company? If so would enjoy your comments. And maybe more info about it all.

Total Comments: 5

Posted: Fri Feb 01, 2008 01:48 pm Post Subject:

Wow, that is a whopper of a fine!!!!


said it found more than 130,000 violations



How can one find out if they paid more than they should have during this time frame when these violations went on? Is there a place where one could go and get this information?

Thanks for a great post mega.

Posted: Fri Feb 01, 2008 02:03 pm Post Subject: I dont know if we can link directly

to some of the news on this or not but it breaking news daily so changes and updates continue. Here is a couple of quotes from the 29th:

SAN FRANCISCO, Jan 29 (Reuters) - California's insurance regulators said on Tuesday they will seek fines of more than $1 billion from UnitedHealth Group Inc and audit the handling of claims by the state's top eight health insurers.
California's Department of Insurance said it is seeking penalties of up to $1.3 billion from UnitedHealth related to the handling of medical claims by its PacifiCare unit.
The department found 133,000 potential violations related to payment for medical care claims, which could result in fines of up to $10,000 each.
"We think these violations have been willful in many cases," Steve Poizner, the state's insurance commissioner, said at a press conference in San Francisco.
The commission said it audited 1.1 million claims and found a violation rate of more than 10 percent.
If the alleged violations are found to be willful, the state can fine the company up to $10,000 per incident. Unwillful violations have a maximum fine of $5,000.
"It's the sheer number of violations that disturbs me. The entire system of paying claims seems to have broken down for this company," Poizner said.



The state's Department of Managed Health Care also has been investigating the matter and is levying a fine of $3.5 million. The department's director, Cindy Ehnes, said the company has agreed to pay that fine.
The two agencies launched a joint investigation into PacifiCare's claim payments in 2007 following a spike in consumer complaints after it was acquired by UnitedHealth in late 2005.
CORRECTIVE ACTION
"We have already taken, and continue to take, aggressive steps to address the operational issues raised by the departments and improve operational performance and service to stakeholders in California," UnitedHealth said in a statement.
"The vast majority of the issues raised by the departments relate to provider services, many of which we have addressed, and we continue to work diligently to resolve the remaining issues," the company said.
UnitedHealth said that the issues, for the most part, have no direct impact on PacifiCare of California members and that they do not relate to United Healthcare's California health plans or UnitedHealth Group's Medicare plans.
Goldman Sachs analyst Matthew Borsch called the development disappointing but not surprising.
"The market is by now well aware of the execution and customer service issues resulting from the integration of multiple large-scale acquisitions (aggravated in some instances by overly aggressive cost cutting)," Borsch said.
UnitedHealth has faced regulatory sanctions in a number of U.S. states related to the issue and lost a "significant" number of customers, he said.
Shares of UnitedHealth were down 2.5 percent, or $1.28, to $50.72 in trading on the New York Stock Exchange.



So as this last quote suggest there are more investigating going on. The company of course is saying that very little will affect the consumer or policy holder but that is yet to be seen. So far I don' t think the investigation has gotten far enough along for them to start publishing how/contact info for policyholders that might be affected.

I will continue to watch this of course from both the market prospective and from the consumer side as well.

Posted: Fri Feb 01, 2008 02:34 pm Post Subject:

We will be here waiting, LOL, thanks for keeping the forum up to date on this mega.

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