Wednesday, September 08, 2010

And The Hits Keep Right On Coming

The Los Angeles Times continues its ongoing, if intermittent, series on insurance companies' malfeasance with this article in today's edition. The target this time is PacificCare, owned by UnitedHealth.

California regulators are seeking fines of up to $9.9 billion from health insurer PacifiCare over allegations that it repeatedly mismanaged medical claims, lost thousands of patient documents, failed to pay doctors what they were owed and ignored calls to fix the problems.

In court filings and other documents, the California Department of Insurance says PacifiCare violated state law nearly 1 million times from 2006 to 2008 after it was purchased by UnitedHealth Group Inc., the nation's largest health insurance company by revenue.
[Emphasis added]

The size of the penalties being sought is staggering, but it is reflective of both state law and the egregious behavior of the HMO/PPO insurance provider. Nearly a million violations at $10,000 a pop is guaranteed to get not only PacifiCare's attention but also that of other insurers in the state.

At the heart of the case is the $9.2-billion deal that put PacifiCare under the wing of UnitedHealth Group, an insurance behemoth based near Minneapolis that now has 25 million policyholders in 50 states and had $81 billion in revenue last year. ...

But complaints emerged soon after the deal closed. Doctors said PacifiCare failed to acknowledge their claims or to enter correct payment contract rates into its computer system, resulting in lower reimbursements. Providers also said the insurer mixed up which physicians belonged to its medical network.

Policyholders, meanwhile, inundated the Department of Insurance with complaints about PacifiCare losing their records, some of which were shipped to India, where they were miscoded and could not be retrieved. Many customers said the insurer denied claims for covered procedures and then ignored requests for help.
[Emphasis added]

The insurer not only broke its contracts with policy holders, it also broke its contracts with health care providers. Ironically, the only violation the company admits to is that for a brief period of time it failed to provide policy holders with written information on how to appeal its decisions. That in itself signals the primary operating procedure: delay, delay, delay until the aggrieved party just gets frustrated and goes away. Or dies.

The case is still pending at the administrative hearing level. The judge in the case will finish hearing the case and will then issue recommendations to the Insurance Commissioner. His decision can then be appealed to the Superior Court, which will start the litigation phase all over again. The system is one which provides due process protection, but one which will take years to complete. The insurance company knows this. It's a feature for them. Delay.

Thankfully, the Los Angeles Times has been covering the health insurance industry relentlessly, exposing that industry's less savory practices. It's amazing what a little sunlight can do, and hopefully it will have some long term effect this time as well.

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