Managed Healthcare Executive - February 2009 - (Page 4) { FOR YOUR BENEFIT } Troubling times have insurers in the hot seat In today’s atmosphere of corporate scrutiny, more plans are facing nes and penalties for dropping the ball BY JULIE MILLER U Julie Miller is editor-in-chief of MANAGED HEALTHCARE EXECUTIVE. She can be reached at julie.miller@ advanstar.com nitedHealth has certainly been preoccupied lately. In fact, it’s been a challenging couple of weeks for many of the top health insurers. Let’s start with United. As you probably heard, the company agreed to pay $350 million to settle a class-action suit that claimed its subsidiary, Ingenix, had understated usualand-customary fees by as much as 28%. A separate agreement calls for United to pay $50 million toward the establishment of a nonpro t entity that would create an independent source of usual-and-customary fees—one that is not owned by an insurer. The new database is supposed to o er patients price transparency. There are at least 100 million bene ciaries nationwide under insurance plans that use such data to price claims for out-of-network services. They will nally have the opportunity to see the typical fees in their local markets. Other major insurers that subscribed to Ingenix’ proprietary service were a ected too. Aetna reached a settlement in which it will contribute $20 million over ve years to help establish the independent database. EVERCARE COMPLAINTS more than 80,000 elderly, blind and disabled people. Patients complained about inaccurate network directories and call center sta who knew nothing about the program. The Texas Health and Human Services Commission elded more than 1,300 complaints. Although it has contracts with the state for four programs, which bring in billions, UnitedHealth or one of its units has paid the department of insurance more than $10 million in nes since 2000, according to the Morning News. The company did respond to concerns about Evercare by increasing sta , adding providers and setting up more phone and fax lines. Patients say it’s still not much better. In other news, WellPoint, another industry giant, was ordered by CMS to stop marketing and enrolling seniors in its Medicare plans because it had violated federal regulations, including denying access to drugs. That is one of the toughest penalties ever given to a private insurer by CMS. WellPoint said its computer system caused the problems, and it had been cooperating with CMS when the order was handed down. These unfavorable headlines come within days or weeks of all the big insurers announcing layo s and posting lowerthan-expected earnings. NOT NOW Also on UnitedHealth’s plate recently is more trouble with its contracted services for the state of Texas, according to the Dallas Morning News. The state ned United’s Evercare unit $1 million late last year and ordered it to increase sta and improve its operations for a program meant to coordinate care for 4 FEBRUARY 2009 New York Attorney General Andrew Cuomo, who was instrumental in the settlements to fund the usual-and-customary database, as well as several other suits against private health insurance companies, believes the tide must turn on insurers. Some could argue Cuomo had the state’s best interest and the best interest of patients at heart. Others could argue the lawsuits were more about making a political statement. Either way, now is not the time for insurers to so much as give the appearance of any impropriety, incompetence or shady behavior. The new Congress is looking to pass paramount legislation in healthcare, and bad news travels fast. MHE
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