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:

2005:

• PacifiCare
• Neighborhood Health Partnership
• John Deere Health Care

2004:

• Oxford Health Plans
• Definity Health
• Golden Rule Health Plans

However, industry analysts don’t necessarily agree. They claim that UHC should have had a process in place before making acquisitions.

Resulting problems

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:

• A Sacramento-area surgeon couldn't schedule surgeries for more than six months because the insurer simply took too long to enter his contract in its computer system.
• A policyholder reportedly spent 11 months trying to get his claims paid for his family and their autistic child. His wife, who needed an EKG, had to keep postponing the test because they feared that they would never pay their claims.

From the San Francisco Gate:

• PacifiCare patients of a pediatrician in Modesto received letters erroneously telling them the doctor was no longer in their network, when he really was.
• A San Diego area doctor reported that PacifiCare simply could not keep track of claims information or adequately respond to his complaints.

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.