The acquisition was a terrible mess for sure and nobody, to include Untied is denying that fact but the claims situation and dollar amounts owed on files going back to 2008 and forward are the issue now. I do remember this and what really jolted the public was United giving the former CEO of PacifiCare a brand new jet as departing gift, meanwhile the mess started. California has 2 insurance governing agencies and this battle is with the department of insurance and United settled with the other compliance agency, Department of Managed Care a while back on a fine of $ 2 million. If you read through here the original fine of $10 billion was reduced and a judge knocked it down to an amount no more than $11 million but the Insurance Commissioner rejected it and imposed $173 million and it is due by July 22nd this year.
You can truly believe the payment problems and late payments were all there and then some. United has pulled out of the individual policy market in California now and focuses on Medicare Advantage and employer insurance policies. When United did start incorporating the HMO plans from PacifiCare it left a lot of employers kind of stuck with very stiff increases too. I still think until today that St. Joseph hospital won’t take any United HMO patients,
Employers in Orange County Looking for New HMO Contracts as St. Josephs and Some Others Begin Cancelling Agreements with Pacificare (UnitedHeatlhCare) – Employer Capitation Contracts
PacifiCare was having it’s problems before hand with patients having to change doctors and the United acquisition made it worse, but all through this, profits continued to rise.
United is no stranger to lawsuits and a couple years ago hired the former Assistant Attorney General of Minnesota as their general counsel. The company sued DOD when they didn’t get awarded a contract for the Tri-Care western military medical care and nobody said a word but later it was announced United had the west coast Tri-Care contract. The company has been known to file legal suits in other areas when denied contracts as well.
Tri-West (Tri-Care Contract) Healthcare Begins Switching Members & Services To United Healthcare, The Contract Awarded After the Insurer Sued the Department of Defense
A couple years ago a former HHS regulator left and went to work for United Healthcare as a VP in the Optum Division. BD
US Health Insurance Regulator Leaving to Take a Job at UnitedHealth Care As Vice President of the Optum Division – Moving to the “For Profit Side” With Business Intelligence Algorithm Dollars To Review
Setting up a major legal fight, UnitedHealth Group Inc. has sued California's insurance commissioner to block his attempt to fine the insurer $173.6 million for violations during a botched 2005 acquisition.
The lawsuit, filed Thursday in Orange County Superior Court, is the latest twist in a long-running political drama. Four years ago, California sought a jaw-dropping fine of nearly $10 billion against UnitedHealth, the nation's largest health insurer. The penalty related to problems handling medical claims and policyholder applications after the insurer bought Cypress-based PacifiCare.
But that record penalty didn't stand. Last year, an administrative law judge rejected much of the state's case and said UnitedHealth should be fined no more than $11.5 million.
Last month, California Insurance Commissioner Dave Jones rejected that ruling in a 220-page decision and imposed the $173.6-million penalty. He ordered UnitedHealth to pay it by July 22.
That drew the lawsuit and a fiery response from UnitedHealth executives Thursday. The insurer, based in Minnetonka, Minn., said Jones was abusing his power and setting a dangerous precedent by seeking such stiff punishment for relatively minor violations.
California initially took action against UnitedHealth in 2008 under then-Insurance Commissioner Steve Poizner, a Republican. At first, he said a fine of $1.3 billion was warranted.
Two years later — while Poizner was seeking the Republican nomination for governor — he upped the ante and sought as much as $10 billion in penalties. To justify the enormous fine, insurance regulators said UnitedHealth committed more than 900,000 violations after taking over PacifiCare.