California Seeks Fines, Penalties Against Insurers / AMA applauds investigation of health insurance industry

CAL/AAEM News Service calaaem_news at yahoo.com
Sat Mar 1 11:07:17 PST 2008


California Seeks Fines, Penalties Against Insurers for Claims Processing Violations

Source: The California Healthline ( http://www.californiahealthline.org )
Date: February 11, 2008


In a California Healthline Special Report, Cindy Ehnes, director of the Department of
Managed Health Care, and Santiago Munoz, associate vice president of clinical services
for the UC Health System discussed the state's investigation into health insurers' claims
processing procedures. 

After a joint investigation with the Department of Insurance, DMHC is seeking millions of
dollars in fines against PacifiCare and its parent company, UnitedHealthcare, for claims
that the insurer allegedly paid late or did not pay at all. The investigation found that
PacifiCare improperly denied more than 30% of claims, Ehnes said. 

"It may sound like they just made a mistake, but in reality, that's what an insurance
company is set up to do is pay claims," Ehnes said, adding, "And so when your primary
function has an error rate of up to 30%, you have a very serious problem, and it is one
that we take very seriously and we want the company to take very seriously as well." 

PacifiCare said the problems resulted from a slow transition after it was acquired by
UnitedHealthcare in late 2005. The company has since taken steps to correct the problems,
according to a statement. 

At UC, the mishandled payments were beginning to affect the health system's ability to
operate, Munoz said. The experience will affect how UC handles its insurance contracts in
the future, he said (Kennedy, California Healthline, 2/11). 

For more information, please visit:
http://www.californiahealthline.org/articles/2008/2/11/California-Seeks-Fines-Penalties-Against-Insurers-for-Claims-Processing-Violations.aspx?av=1&topicID=37

--------------------------------------------------------

AMA applauds investigation of health insurance industry

Source: The American Medical Association ( http://www.ama-assn.org )
Date: Feburary 14, 2008


The AMA joined New York Attorney General Andrew Cuomo at a Feb. 13 press conference to
announce his industry-wide investigation of UnitedHealth Group and a probe of 16 national
health insurers regarding an alleged scheme to defraud consumers.

“The investigation launched today by New York Attorney General Andrew Cuomo calls into
question the validity of a system that health insurers have used for years to reimburse
physicians and their enrolled members,” said AMA President-elect Nancy H. Nielsen, MD,
PhD. “UnitedHealthGroup and other health insurers have shortchanged tens of millions of
patients who agreed to pay higher premiums for access to their choice of physicians from
outside a health insurers’ network.”

At the center of the scheme is Ingenix Inc., the nation’s largest provider of health care
billing information, which serves as a conduit for rigged data to the largest insurers in
the country. As shown throughout this six-month investigation, Ingenix operates a
defected and manipulated database that most major health insurers use to set
reimbursement rates for out-of-network medical expenses. By distorting the “reasonable
and customary” rate, insurers are able to keep their reimbursements artificially low and
force patients to absorb a higher share of the costs.

“These patients have a right to expect fair and accurate payment for services promised by
health insurers,” said Dr. Nielsen. “The AMA greatly appreciates the Attorney General’s
interest and leadership in protecting consumers, and we offer our full cooperation in any
effort to hold UnitedHealth accountable to New York state laws.”

Read the full Feb. 13 statement from Dr. Nielsen.

http://www.ama-assn.org/ama/pub/category/18316.html


Abid Mogannam &
Brian Potts MD, MBA
Managing Editors, CAL/AAEM News Service
University of California, Irvine

The CAL/AAEM Archives are available at: http://maillists.uci.edu/mailman/public/calaaem/



      ____________________________________________________________________________________
Be a better friend, newshound, and 
know-it-all with Yahoo! Mobile.  Try it now.  http://mobile.yahoo.com/;_ylt=Ahu06i62sR8HDtDypao8Wcj9tAcJ 



More information about the CALAAEM mailing list