UnitedHealth Takes Potential $1.3 Billion Fine Seriously
WHO: UnitedHealth Group, an heath insurance provider.
WHAT: An investigation by the California Department of Insurance found evidence of 133,000 violations of state laws and regulations regarding payments for medical care.
WHERE:Health plan faces fines of $1.33 billion [LA Times]
THE QUOTE:""Our integration issues and challenges shouldn't affect our providers, and they shouldn't affect our members," he said. "We're very regretful about that."
At the same time, UnitedHealth executives downplayed the effect on members and patient care, characterizing the problems largely as administrative errors. Still, they said, the company was taking the allegations seriously."
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Comments:
Our company got rid of these shysters two years ago. orrible insurers.
How do these people goto bed at night?
How does these people goto bed at ngiht?
they go to bed with alot of money in their pocket...
Well, they go to bed on mattresses that cost more than you make in 3 months, in houses that cost more than you'll make in 40 years.
If they're not shitting their pants over a potential 1.33 billion dollar fine, it's just more evidence the market for health care is broken. (Because if the market worked, they wouldn't have 1.33 billion dollars to laugh off as the cost of doing business)
The thing that is soul-crushing is fines against businesses are never paid for by the stockholders, but are passed on to the customers as a cost of doing business. So the customers of UHG, who already got screwed once, will get screwed again with $1.3 billion in higher premiums than they would have. Other insurance companies will leverage their ability to raise their premiums even higher because of their cost advantage, which greatly diminishes the value of switching providers.
When companies behave illegally, we lose on the front end and the back end.
They sleep knowing that the money they saved is going toward their second home. :-)
I wonder how often UnitedHealth did this exact same thing in other states...
@Cowboys_fan: Not necessarily. If the net result is that they didn't have to pay for $1.3> billion in claims
THESE HEADLINES ARE SERIOUSLY ANNOYING...point taken.
@jnews:
What would you have us do?
Death penalty for the corporation? Sell off their assets and consider them dead? Hmm, just might work.
Well, no wonder my United Health insurance premiums went up 11 percent this year. I'm so happy to contribute to the legal fees and damages. Grrrrr!!!
This was not a mistake due to the merger. This is a standard practice for sleezy insurance companies. They purposely delay paying claims in order to get a few more days - weeks - months of interest on those funds. They pat deny large blocks of claims or every claim sent in by new members for a set period of time. Or they just pretend they never received claim submissions forcing clinics to submit and re-submit wasting their time.
It is a similar tactic used by long term disability and some workers compensation insurers. Delay delay delay and hope a certain percentage give up and if you end up paying in the end your no worse off than if you paid up front. But you probably banked some interest on that money in the mean time and got pure profit from the percentage of claims that just gave up.
Penalties need to come out of exec salaries and directly out of shareholder profits.
There need to be serious penalties at the federal level for obstructing and delaying a claim by an insurance company.
1.33 billion dollars that will subsequently be passed on to policyholders.
What I find funny is this part
"Separately, the state Department of Managed Health Care alleged that 30% of the medical claims it reviewed were improperly denied. That agency is seeking an additional $3.5 million in fines.
"These were very serious violations," said Cindy Ehnes, executive director of the Department of Managed Health Care. "The most fundamental promise of insurance is that they will pay when you are sick, and they will pay those physicians and hospitals in a fair manner.""
3.5 million in fines for totally screwing over paying customers. That's pocket change. I bet they regard that as a win because the fine cost them less. Hopefully this new 1.3 billion might wake them up.
@unklegwar, jnews and Cowboys_fan: Actually, I doubt that the fines will have any effect on premiums.
Major insurance companies have 100 times that much in reserves, at least. It's nothing to sneeze at, but it won't have a huge effect on their balance sheet. UnitedHealth will simply continue to cut corners by denying coverage and daring policy holders to take their chances against their well-compensated lawyers.
Now, if their managed assets have suffered the effects of the sub-prime crisis, THEN you'll see it passed down to the policyholders. But $1.33 billion? That's pocket change.
Wait a second, Blue Shield just got fined 12 million in California for unfairly revoking coverage for insured people AFTER they got sick.
12 million for overtly screwing people
1.3 billion for not dotting your i's and crossing your t's when it comes to paying your bills.
Does this seem a little disparate to anyone else?
Article regarding cancellation legislation working its way through the California Legislature here:
[www.capitolweekly.net]
They'll just make up the fine with a $50 per person fuel surcharge.
Oh, wait, wrong United. Same crappy name, different sleazy company.
@TechnoDestructo: yes, the free market is broken, like it is with telecoms. a market failure as adam smith called it. i just switched to empire blue cross from those scum bags. much happier. every doctor told me they are slow to pay and they pay the lowest to top it off. remember their ceo doctor that tried to boogy with that huge golden parachute too for successfully driving down share holder value?
@mikelotus: The important thing is, we don't have (cue scary music) socialized medicine!
I mean, what we would do with all the money we save and the years not lost to amenable mortality?
Pacificare was a mess before the merger, and the merger just made it all worse. I am not siding with United Health in the least, but it seems to me that they didn't knwo what they were getting into when they took over Pacificare.
On top of that, United Health has been going crazy implementing a bunch of changes that providers cannot reasonably abide by. The recently had to delay implementation of one big change precisely because it was absolutely unreasonable and clearly designed to make it harder to comply with their requirements. And if the provider doesn't comply, UH would drastically reduce their payment on that claim.
How bout this? Instead of a fine, the FTC (or whomever governs corporations) pulls their charter for X years and bans them from reapplying in any other state. It's the corporation equivalent of prison. Oh yeah, by the way, they're not allowed to fire anyone.
Personally, I've worked with the system that they use to control operations. It's called Facets. Depending on how the claims come in, they can auto adjudicate, pend review or deny. All depends on how they set up the ruleset. Sounds to me like they were configuring that ruleset contrary to state regulations. Shame on them for doing so, if they knew they were doing it. However, United is HUGE. I had people from PacifiCare working for me, and they had a config department of over 60 people. United's probably got 4-5 times that just working on the configuration of their system.
For the person who stated that they deny or pend claims for new members is full of it. The administrative overhead to do such a thing would be ridiculous. I can authoritatively say that from experience.
I will say that they routinely pend certain claims, and the goal is to have them paid within 21 days. The thing is that providers get pissed when insurance doesn't pay on time and may drop from network as a result. The insurance companies will bend over backwards to keep a provider in network.
There is also a feature called a "drag" that can be enabled that will delay a payment X number of days before it is paid. They definitely do this to keep interest dollars. Changing the drag results in a calculable benefit to the company.
Long story short, they knew what they were doing.
Hmm, this is a start. Before this the state was fining other companies (like blue cross) something utterly pathetic..wasn't even in the hundreds of millions of dollars (what krylonultraflat said above).
Now, if it was 13 billion and not 1.3 billion, and from every single insurance provider out there, I might be a bit happier.
I'm currently insured through UHC. This makes me unnaturally happy. Very, very difficult company to deal with.
That's funny. They've denied many of my mother's legitimate claims. She's had to contact the Attorney General several times in order to get UHC to pay up.
Someone is "full of it," and it isn't bohemian.
@RvLeshrac: They can, and do deny legit claims, but not because they are new members, genius. It was most likely due to UM or something coming in under an inappropriate procedure code without an appropriate diagnosis. Unless you know more details, that would simply make you uninformed.
I stand by my statement that anyone who believes that insurance companies routinely automatically deny claims to new members is "full of it".
Actually they DO deny claims. I started with a small business and I actually had to quit the job over the health plan (UHC) because they were taking my money happily from my paycheck and then happily denying my wife's treatments. I tried faxing and calling but met the response: "that is an experimental treatment".. My wife has been on this 'experimental treatment' for 7 years or so. Aetna paid and now Anthem is paying.
UHC is blacklisted at the pain clinic we go to as they NEVER pay claims. They claim ALL procedures are not covered. The doctor there tried everything to work with them and they stonewalled. The doctor deserves a pat on the back as he worked with me and billed me as uninsured (which I basically was with UHC) and then split it with me.
I honestly want my premiums refunded. They refused to meet their end of the contract but I have no lawyer that can spank them that hard. The AG in VA is useless and hasnt responded to letters about the refusal of treatments.
Funny that several clinics know not to accept UHC isnt it?
That's funny, I just got an email from HR earlier this week that for several months UHC had "computer errors" that resulted in ~half of my coworkers having services denied for payment,
Sounds like "computer error" is code for standard practice with UHC.
I'm pretty sure a $1.33 billion fine actually is taken seriously.