Insurance Bad Faith
Article: United Health Care: Huge Fines & Scandals
United Health Care, Inc. (UHC) has seen better days. Insurance Commissioners from California and Texas have slapped the health care provider with huge fines and its former Chief Executive Officer was replaced in 2006 over a stock option scandal.
Fines & Scandals
Many states have sanctioned the Minnesota based insurer for poor claims handling processes over the past five years and it has recently been hit with several very large fines. In November 2007, the Texas Department of Insurance imposed a $4.4 million fine against UHC for prompt payment violations. In January 2008, California’s Department of Managed Health Care fined PacifiCare, which was acquired by UHC in 2005, $3.5 million for poor claim handling. In the same action, California’s Insurance Commissioner, Steven Poizner, cited UHC for over 130,000 claim handling violations and said that the insurer may be subject to $1.3 billion in penalties.
Fines aren’t the only problem the insurer has been facing. In late 2006, UHC’s Chief Executive Officer, Dr. William McGuire, left the company after a scandal broke out over backdated stock options allegedly worth over $1.5 billion. McGuire, and several dozen others in UHC’s senior management team, resigned or were terminated around the same time for similar issues.
Insurer blames acquisition process
UHC has blamed much of its current claim handling problems on recent acquisitions and has admitted that the transition process has been more difficult than expected. According to the company’s website, www.uhc.com, it acquired the following companies in 2004 and 2005:
However, industry analysts don’t necessarily agree. They claim that UHC should have had a process in place before making acquisitions.
Whatever the reason for UHC’s claim handling issues, the problems that have resulted are not doing anything to improve the insurer’s image. Here are some examples from two California news agencies that show how the company’s actions have affected doctors and patients alike:
From the Sacramento Bee:
From the San Francisco Gate:
Insurance companies need to have processes in place to care for their policyholders. If your insurance company has denied your valid claim or acted in bad faith, contact an attorney whose practice focuses on insurance issues. To contact a qualified attorney for a free, no-obligation consultation, please click here.
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