PacifiCare accused of widespread violations.

PacifiCare accused of widespread violations
It could face $1.3 billion in penalties for allegedly mishandling claims.
The Associated Press

SAN FRANCISCO – Health insurer PacifiCare could face as much as $1.3 billion in penalties for allegedly handling claims unfairly following its takeover two years ago by UnitedHealth Group Inc., state officials said today.
http://www.ocregister.com/news/claims-pacificare-violations-1969293-unitedhealth-care
California regulators investigated and uncovered at least 130,000 alleged violations of state laws and regulations regarding payments for medical care, California Insurance Commissioner Steve Poizner announced in a statement.
A maximum penalty of $10,000 applies to each violation, which include wrongful denials of covered claims, incorrect payments, lost documents and delays in handling claims.
"After years of broken promises to California regulators, it became crystal clear that PacifiCare simply could not or would not fix the meltdown in its claims-paying process," Poizner said.
Minneapolis-based UnitedHealth purchased Cypress-based PacifiCare for $9.2 billion in January 2006. More than 3 million Californians were added to UnitedHealth in the deal. The company now has about 27 million enrollees nationwide.
http://www.ocregister.com/news/claims-pacificare-violations-1969293-unitedhealth-care
UnitedHealth officials said problems occurred when the company tried to make too many changes too quickly.
"The pace of the transition may have resulted in some physicians and other care providers experiencing inconsistent service in the past," spokesman Tyler Mason said.
PacifiCare had already disclosed many of the issues raised by regulators prior to the investigation and was taking "aggressive steps" to make improvements, Mason said.
http://www.ocregister.com/news/claims-pacificare-violations-1969293-unitedhealth-care
PacifiCare was also fined $3.5 million by California's Department of Managed Health Care over the alleged violations.
Department of Insurance investigators reviewed PacifiCare claims processed between July 2005 and May 2007 following complaints from patients and doctors, Poizner said.
http://www.ocregister.com/news/claims-pacificare-violations-1969293-unitedhealth-care
The maximum fine will apply only if authorities prove all the violations and show they were committed as part of a deliberate scheme.
UnitedHealth's regional chief executive David Hansen said the "vast majority" of the violations were administrative errors that did not harm PacifiCare members. More than 80,000 of the violations, he said, stemmed from not sending health care providers letters acknowledging that claims were received, even though most of those claims were paid on time, he said.
http://www.ocregister.com/news/claims-pacificare-violations-1969293-unitedhealth-care