Health Insurer Facing Billion-dollar Penalty
The largest health insurer in the nation, UnitedHealth, is under fire, facing penalties of up to $1.3 billion for tens of thousands of alleged violations, including wrongly denying claims, losing patient records and failing to respond to complaints.
California Insurance Commissioner Steve Poizner announced he is suing UnitedHealth’s California subsidiary, Pacificare, for mishandling tens of thousands of “preferred provider” plan claims filed between 2005 and 2007.
Said Pozner, "I want to send a clear signal that I won't tolerate shoddy payment practices. When people are sick, that's when they rely on their insurance company. We tried to work with [the insurer], but they were unable or unwilling to fix the problems."
Pacificare/UnitedHealth was also fined $3.5 million by the Department of Managed Health Care, which oversees the insurer’s HMO business, for mishandling managed care claims. A joint investigation conducted by the two agencies found that Pacificare, which merged with United Health in 2005, also failed to pay claims in a timely manner, incorrectly paid claims and mishandled provider networks. Altogether, the investigation found approximately 130,000 alleged violations of state law.
Pacificare spokesman Tyler Mason said the insurer has taken "aggressive steps" to address these issues and improve service to California policyholders.
Published on January 30, 2008
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