State Regulators Probe UnitedHealth Contract Adherence; Suit Filed
California's Department of Insurance and Department of Managed Health Care are investigating allegations of late and inaccurate payments that have affected patient access to care, the Sacramento Business Journal reports.
State regulators this week said they will work jointly where possible to investigate and resolve problems they identify.
Rick Martin, DMHC assistant deputy director, said the agency for at least one month has been conducting a preliminary investigation of UnitedHealth. If the agency identifies violations of state law, the insurer could face fines and other penalties.
Separately, Radiological Associates of Sacramento Medical Group earlier this month filed the lawsuit against UnitedHealth in a Sacramento Superior Court. The group is the largest private radiology and radiation oncology practice in Northern California.
The medical group had a contract with PacifiCare, but UnitedHealth in 2005 took over the contract when it merged with PacifiCare.
UnitedHealth paid for services under the terms of the contract, except in cases when a patient during a single visit had two or more diagnostic imaging procedures that the insurer considered one procedure. In such cases, UnitedHealth recalculated the amount and paid less than was due under the contract, according to the lawsuit.
The lawsuit alleges breach of contract and seeks full payment, compensatory damages and legal costs. No amount was disclosed, but plaintiffs say it is "significant."
Cheryl Randolph, spokesperson for UnitedHealth, said the merger required the companies to integrate their physician networks quickly, a move that caused "challenges that may have affected physician contracts, claims payment and other administrative operations." She said that the insurer has corrected many of its problems and is cooperating with the state investigations.
Randolph declined to comment on the lawsuit (Robertson, Sacramento Business Journal, 6/1).