Back in September California regulators were digging around and were looking to fine United Healthcare subsidiary Pacificare $10 billion in fines, based on data found in audits. We all know that getting a judgment and collecting are 2 different issues and some get settled out of court too. In 2008 Pacificare was find a record 3.5 million dollars in California. 

California Regulators Seeking up to 10 Billion in Fines Against United HealthCare With Over 1 Million Violations After The Purchase of Pacificare HMO

As it appears now, profits generated in the area of $120 Million are being blocked from the HMO subsidiary of United in order to be set aside for these potential fines, in other words investors are not going to get the benefit of dividends just yet without a full inquisition.  In the OC it has been a bit of a rat race for employers too with the merging of United/Pacificare as some hospitals have stated the employer based plans don’t offer enough compensation for them to continue to see 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

The press release stated that PacifiCare gave legal notice to pay the $120 million in dividends to 2 subsidiaries of United and who those are were not named here. 

Insurance Commissioner Steve Poizner today issued an order blocking PacifiCare Life & Health Insurance Co. from paying its parent company a $120 million dividend, saying PacifiCare may need the money to pay penalties in an enforcement action the Department of Insurance is presently prosecuting.

In other related news United Pharmacy Saver Drug program has been expanded to 5 additional retailers Target Corporation, H-E-B, Hy-Vee, Inc., Publix Super Markets, Inc., Food Lion, Bloom, Harveys and Sweetbay Supermarket are joining Pharmacy Saver.  This represents an additional savings for consumers and allows additional information to be collected for algorithmic formulas to be run to predict diseases such as diabetes and of course the ability to sell medication data as well.  If you don’t want to be tracked, just pay the $4.00 charge instead of saving $2.00 and that will help with privacy issues.  If you are not aware of how this tracking takes place you can read up a the link below as United as a subsidiary that sells your prescription data too.  This has been going on for years and they make big bucks with it.  There’s also some additional information included on the MIB, another organization that collects all your healthcare data from insurance companies and distributes to all insurance company inquires, a couple eye openers at this link if you have not seen this before. 

Insurers Denied Coverage Based on Pre-Existing Conditions–Risk Assessment Algorithms We Have to Live With Until 2014

Back on the original track here, United can file a protest which I am sure they might entertain, but with all the record keeping and digging through files the insurance commissioner sounds pretty confident that he has found his proof.  Personally out in the field in working with doctor’s offices I heard it all over the place with providers complaining about their claims processing and lack of responses and the huge amount of time it was taking, and even at one time PacifiCare came out and said themselves in the news that they needed to be more “user friendly”. 

If you remember too the Ingenix subsidiary of United Healthcare just recently finished up taking in doctors claims for 15 years of under payments, using their algorithms for payment and they licenses those algorithms to other insurance companies and lawsuits are still active and plenty all over the US outside of this major settlement. 

AMA Announced Settlement of Class Action Suit of $350 Million with Ingenix (United Healthcare)

This is a company to research and watch I feel by all means as their portfolio is so diversified to even include purchasing a company in China that has a line of communication with the FDA and they are promoting more Chinese drugs and medical devices in the US and globally.  Subsidiaries and their actions are quietly behind the scenes sometimes turning the world upside down from what you have known in the past and making record profits doing it while care is sometimes suffering as a result of algorithms for profit only.  BD 

"Nobody knows what the outcome of the enforcement action will be," Poizner said. "But it is entirely possible that allowing United to siphon off $120 million would enable them to turn penalties into profits. My order simply requires that the company keep the money where it would be available to satisfy any order that is issued."

After UnitedHealth Group purchased PacifiCare Health Systems in 2005 for $8 billion, the Department of Insurance began receiving hundreds of complaints from consumers and doctors regarding improper handling of thousands of claims. An examination resulted in the Department charging PacifiCare with over 130,000 violations of law. Each violation is subject to a penalty of up to $5,000, or $10,000 if the violation was willful.

Insurance Commissioner Steve Poizner Blocks $120 Million Dollar Pacificare Dividend


Post a Comment

Google Analytics Alternative