This recent article in The New York Times has forced our hand. It’s time to pony up a Road to Hellth “Liar, Liar, Pants on Fire Award”. And the winner this week is….UnitedHealthcare!
United is America’s largest commercial health insurer based upon revenue. It collected about $22 billion in the 4th quarter of 2009 alone, and its $944 million quarterly net profit was 30% higher than in the prior year, despite enrolling fewer patients.
UnitedHealthcare has always been the “Attila-the-Hun” of abrasive, profit-oriented health insurers. It blazed new trails in executive compensation when it came to light that then CEO Bill McGuire had received $342 million in compensation from 2000 to 2005, plus stock options valued at $1.6 billion in 2006 alone. As if that weren’t enough, the company ended up paying $895 million to settle a shareholder class action suit over improperly backdating stock options in an effort to raise his compensation still further. Stephen J. Hemsley, United’s current CEO, only made a paltry $3.2 million in 2008, but he can, thank goodness, always fall back on $744.2 million in stock options to make ends meet. (Many of those options were awarded in the same backdating scandal that led to the departure of his predecessor.)
United has been a pioneer in other ways as well. Just a year ago, the company settled two lawsuits related to its wholly owned Ingenix subsidiary. Ingenix operates databases and algorithms that are used as a basis for United and many other insurers to determine healthcare provider payments. The first lawsuit was filed by the State of New York Attorney General Andrew Cuomo. His investigation found that the company had defrauded both its patient customers and healthcare providers of hundreds of millions of dollars in payments by deliberately distorting the data used to report “usual and customary” payments. As reported here:
“Cuomo’s investigation also found a clear example of the scheme: United insurers knew most simple doctor visits cost $200, but claimed to their members the typical rate was only $77. The insurers then applied the contractual reimbursement rate of 80%, covering only $62 for a $200 bill, and leaving the patient to cover the $138 balance.”
In the course of reviewing more than 1 million bills and the Ingenix databases, Cuomo’s office determined that some physicians in New York were underpaid by as much as 28%. The company agreed to settle with New York by scrapping the two databases that it had rigged, and setting up an independent non-profit to provide a valid version of the necessary information. To settle a second federal class-action lawsuit, United agreed to re-pay some $350 million that it had wrongfully obtained from physicians and patients.
After all of that, plus miscellaneous other accusations of fraud and wrongdoing that have been leveled against the company, it is with great pride that we now find yet another reason to honor UnitedHealthcare with this week’s LLPOF award.
It seems that United is demanding that a consortium of New York hospitals notify the company within 24 hours of when one of United’s policy holders is admitted. The penalty for late notification? The insurance company would cut all of the hospital’s payments for the case in half.
According to the NYT article, UnitedHealthcare claims that, “the proposed rule is meant to improve the quality of care and cut costs by allowing insurance case managers to jump in right away.” It is certainly great to know that United’s case managers (who are not doctors), will know many far, far better ways to manage each patient’s illness than the hospitals’ own actual doctors and nurses, although the article does not say how they came by this medical omniscience. (Given that this is the case, you have to wonder why UnitedHealthcare doesn’t just start its own hospitals and provide medical care directly, and with far better results than would be available elsewhere?)
However the pièce de résistance (and the reason for the award) comes as Dr. Sam Ho, United’s chief medical officer insists that “UnitedHealthcare’s push for notification was not motivated by money, and that it would be happy if it never had to impose a penalty.”
“Absolutely, honestly, sincerely, this is a genuine attempt to try to improve outcomes for patients,” said he.
Which reminds us of a much older quotation by someone who has never had to reach a fraud settlement with the State of New York.
“When a fellow says it hain’t the money but the principle o’ the thing, it’s th’ money.” ~Frank McKinney “Kin” Hubbard, Hoss Sense and Nonsense, 1926
That pretty much says it all.
(Editor’s Note: We are sorry to report that the LLPOF award does not come with a cash prize. The awardee will have to provide one for itself. With history as our guide, we have no doubt as to its ability to do so by whatever means necessary…)