U.S. HEALTHCARE: New Jersey Report Notes Deficiencies
A new report by New Jersey regulators on the business practices of U.S. Healthcare, prior to and during the organization's 1997 merger with Aetna Inc., "paints a disturbing picture of how [it] conducted its operations," the Bergen Record reports. The first-of-its-kind "market-conduct survey" looked at operations of the HMO from October 1995 to February 1997, while it was the largest in the state with 32% market share. It found a 92.5% error rate out of 40 complaints reviewed, deceptive advertising for the company's emergency medical care in 11% of 159 ads reviewed and claims payment problems in 42.7% of 164 cases reviewed. Noting that the problems have been resolved, Betsy Sell, a spokesperson for Aetna U.S. Healthcare, said, "This is old news." Company officials blamed some of the problems on the merger. State Department of Health and Senior Services Acting Commissioner Christine Grant, in a statement accompanying the report, noted that the HMO has corrected most violations outlined by the report, and acknowledged the firm's hiring of 100 new employees to improve its claims handling. And Tom Breslin, spokesperson for the state Department of Health and Human Services, "said the company was not fined because it worked with state regulators to correct the problems." But Anthony Wright of New Jersey Citizen Action said, "The lack of penalties creates a corporate precedent. You can do what you want to do and get away with it."
Not the End of It
The report may create further problems for Aetna U.S. Healthcare as it attempts to acquire PruCare, a move that would give the combined organization 38% control over the New Jersey managed care market. The AMA has already asked the U.S. Department of Justice to block the merger on antitrust grounds. Dr. Randolph Smoake, chair of the AMA's board of trustees, said Aetna's reputation among doctors is poor. "They put patients through hassles to get the proper medical care," he said. Wright added, "There's a certain arrogance reflected in the violations that could increase with the proposed takeover of PruCare. Some of the violations [in the report] suggest the company has so much market share that it doesn't care about its practices" (Diamond, 5/9).