Citing the recent historic action by the State of California against UnitedHealth Group’s PacifiCare, Nevada Assembly Speaker Barbara Buckley, Clark County Commission Chairman Rory Reid, SEIU Nevada nurses, the Clark County Medical Society, the Nevada State Medical Association and the American Medical Association raised additional concerns about the impact of the UnitedHealth takeover of Sierra Health Services on Nevada’s consumers and healthcare safety net.
Just last week, a joint investigation by the California Department of Managed Health Care and Department of Insurance found PacifiCare had violated California state regulations by mishandling more than 130,000 insurance claims. The violations – ranging from failing to pay claims in a timely manner to wrongfully denying claims, losing patient records and mishandling complaints – could cost the health insurance giant up to $1.3 billion in fines.
“There is no doubt that egregious business practices used by UnitedHealth-owned PacifiCare have caused significant harm to patients and physicians in California,” noted William G. Plested, M.D., a California surgeon and immediate past president of the American Medical Association. “UnitedHealth’s dismissive attitude toward its regulatory obligations is not unique to California. Several states continue to battle UnitedHealth’s pervasive philosophy that it is more cost-effective to violate state law and risk a possible fine, than to comply with laws designed to protect patients, physicians and employers."
The California Department of Insurance’s official Statement of Charges against the insurer offered a number of examples of the harm UnitedHealth caused to patients and providers by denying claims, including the story of “Craig,” who tried for 11 months to get PacifiCare to pay claims for care for himself, his wife and their autistic son. The claims were “improperly denied” because of the insurer’s “flagrant and intentional loss or misplacement/mishandling of the multiple copies” of Craig’s paperwork. PacifiCare also failed to tell the family what recourse they had to appeal the denial. The repeated denials of claims and late payments to their doctor eventually “caused Craig’s wife to delay care recommended by her doctor.”
“It should be a red flag for Nevada’s regulators and consumers to learn that this company is being pursued for $1.3 billion because of its broken promises to California residents,” said Assembly Speaker Barbara Buckley. “What can Nevada residents expect?”
"Given United's recent history in California, Nevadans should be concerned about the company having a monopoly on Nevada's insurance market," said Clark County Commission Chairman Rory Reid. "Our healthcare system - especially UMC, already struggling to serve the bulk of our Medicaid and uninsured patients - may would not survive the unpaid bills or lowered payment rates a UnitedHealth monopoly would surely bring."
UnitedHealth’s pending takeover of Sierra Health Services would give the company control over 94 percent of the Clark County and 80 percent of all of Nevada’s commercial HMO market. This would give UnitedHealth more dominance in the market in Nevada than it has in California, which may be all the more dangerous given that Nevada has a more fragile healthcare system and regulatory structure. The concern was well-stated in the California Department of Insurance news release announcing the action against UnitedHealth, which was found to have “made large scale and willful decisions to use broken systems to process claims and respond to providers, while continually and effectively collecting premiums.”
“It is clear that UnitedHealth has had repeated problems following the law in other states,” said Fredo Serrano, a Registered Nurse at Sunrise Hospital and SEIU Nevada member. “It is equally clear that the lives of patients are at stake. A denied claim is denied care for a patient, and greater profit for the insurer.”
Serrano has seen the impact of anticompetitive insurance practices on healthcare quality and access after 620,000 Sierra Health members were denied access to local HCA hospitals when the chain refused to accept lower reimbursement rates from the insurer in January of 2007. Serrano fears worse will happen should UnitedHealth take dominant control of the Nevada market. “My patients deserve more,” he concluded.
The California decision challenges the behavior of UnitedHealth since it acquired PacifiCare and we urge the Nevada Commissioner of Insurance to review the behavior of UnitedHealth in Nevada in light of the California findings. The coalition urges the Attorney General and the federal Department of Justice to consider this pattern of post-acquisition behavior by UnitedHealth as they continue their review of the anti-trust issues in the Nevada takeover.
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