PacifiCare of California is Directly Addressing Findings of Regulatory Exams
CYPRESS, Calif.--UnitedHealthcare, a UnitedHealth Group (NYSE:UNH) company, said today that it has made solid progress in addressing the findings of examinations of its PacifiCare health plans conducted by the California Department of Managed Health Care (DMHC) and the California Department of Insurance (CDI) last year. UnitedHealthcare is working closely with both regulatory departments to resolve any outstanding issues, and the CDI has not yet levied a financial penalty related to PacifiCare's exam findings.
The DMHC and CDI examinations during June 2007 identified concerns that were largely administrative and provider-related. The findings related to: claims processing accuracy and timeliness; accurate and timely interest payments; timely implementation of provider contracts; and timely, accurate provider dispute resolution.
The majority of the issues raised by the departments have no direct effect on PacifiCare members. They also do not relate to UnitedHealthcare's California health plans or UnitedHealth Group's Medicare plans. PacifiCare had identified and disclosed to the regulators many of the issues raised in their examination findings prior to the audit process. As a result, the Company already had made progress resolving many of the issues before the examination findings were presented.
"We have already taken, and continue to take, aggressive steps to address the issues raised by the departments and to improve operational performance and service in California. We are committed to delivering access to high-quality, affordable health care in California, and we take seriously our responsibility to work effectively with physicians, hospitals and regulators to achieve that," said David Hansen, Chief Executive Officer of UnitedHealthcare, Pacific Region. "We have conducted a top-to-bottom review of PacifiCare's operations, procedures and policies and are working closely with state regulators to ensure that we resolve any outstanding performance issues, in part through Corrective Action Plans submitted to both departments."
The majority of the DMHC exam findings occurred in PacifiCare of California's Point-of-Service (POS) products, which cover 60,000 people out of a total of 1.25 million PacifiCare of California Health Maintenance Organization (HMO) members. The CDI findings relate largely to the PacifiCare Life and Health Insurance Company's Preferred Provider Organization (PPO) business, which covers 130,000 members of a total 860,000 people served by UnitedHealth Group in PPO plans in California.
Some of the issues raised by the departments occurred as a result of a provider network transition, which had to be completed six months earlier than originally anticipated, following the merger of UnitedHealth Group and PacifiCare. Importantly for its health plan members, during that transition PacifiCare increased its statewide network by more than 9,000 physicians and 21 hospitals. However, the transition also resulted in some provider reimbursement accuracy and timeliness issues, which, for the most part, were addressed and corrected during 2007.
"We recognize that the pace of the transition may have resulted in some physicians and other care providers experiencing inconsistent service in the past," Hansen said. "The steps we are taking in California are part of a broader, national effort to deliver better service to all stakeholders that has yielded notable success so far, and we intend to continue to improve our service."
The Company's Actions:
UnitedHealthcare has taken the following steps to address the departments' findings:
* The processing errors involving POS claims, which were the primary focus of the DMHC exam findings, are largely resolved. The Company also is making good progress on ensuring the timely and accurate resolution of provider disputes.
* A majority of the claims payment issues identified by the CDI have been resolved, and systemic changes have been made to help avoid issues in the future.
* The Company is adding approximately 50 full-time employees in California to address issues related to claims processing and data entry, provider dispute resolution and resolution of provider claims. The Company has also centralized POS claims processing at PacifiCare's Cypress, Calif., headquarters.
* We have hired a Vice President of Transactions Oversight, a new, senior position to oversee the systemic improvements we are making and independently monitor performance from Cypress.
* Additional steps taken include: 1) re-reviewing POS claims; 2) ensuring accurate interest was paid on claims; and 3) implementing new policies and procedures aimed at: improving contract loading; increasing claims reimbursement timeliness and accuracy; and reducing provider disputes and member appeals.
The steps taken now in California are part of a broader effort to make sure UnitedHealthcare (including its PacifiCare business) is providing access to quality, affordable health care and the best possible service to its customers, physicians and other care providers.
Hansen added: "While there is a theoretical maximum penalty, we believe the Commissioner will take into consideration the fact that the vast majority of the violations were administrative in nature and did not result in harm to our members. For example, over 80,000 of the noted violations were related to not sending providers an acknowledgement letter for claims received. However, the majority of these claims were paid on time."
Great strides have been made in improving service to UnitedHealthcare's customers and physicians over the last year. UnitedHealthcare has dramatically improved claims-payment accuracy, which exceeded 99 percent in the fourth quarter of 2007. Call quality also continues to improve, with first-call accuracy in the fourth quarter of 2007 up 40 percent year-over-year for consumers and 60 percent year-over-year for physicians. Customer satisfaction on post-call surveys was approximately 90 percent last December, reflecting the strengthened integrated service approach the Company now takes.
About UnitedHealthcare
UnitedHealthcare (www.unitedhealthcare.com) provides a full spectrum of consumer-oriented health benefit plans and services. The company organizes access to quality, affordable health care services on behalf of more than 26 million individual consumers, contracting directly with more than 560,000 physicians and care professionals and 4,800 hospitals nationwide to offer consumers broad, convenient access to services nationwide. UnitedHealthcare is one of the businesses of UnitedHealth Group.
About UnitedHealth Group
UnitedHealth Group (NYSE:UNH) is a Fortune 50 diversified health and well-being company dedicated to making health care work better. Through its family of businesses, UnitedHealth Group serves more than 70 million individuals nationwide. Visit www.unitedhealthgroup.com for more information.
Forward-Looking Statements
This press release may contain statements, estimates, projections, guidance or outlook that constitute "forward-looking" statements as defined under U.S. federal securities laws. Generally the words "believe," "expect," "intend," "estimate," "anticipate," "plan," "project," "will" and similar expressions, identify forward-looking statements, which generally are not historical in nature. These statements may contain information about financial prospects, economic conditions, trends and uncertainties. We caution that actual results could differ materially from those that management expects, depending on the outcome of certain factors. These forward-looking statements involve risks and uncertainties that may cause UnitedHealth Group's actual results to differ materially from the results discussed in the forward-looking statements. Factors that could cause results to differ materially from the forward-looking statements include the amount of fines and penalties, if any, actually levied by the California Department of Insurance as a result of its examination of the Company's PacifiCare health plans.
Contacts
UnitedHealthcare
Tyler Mason, 714-226-3530
tyler.mason@phs.com
The DMHC and CDI examinations during June 2007 identified concerns that were largely administrative and provider-related. The findings related to: claims processing accuracy and timeliness; accurate and timely interest payments; timely implementation of provider contracts; and timely, accurate provider dispute resolution.
The majority of the issues raised by the departments have no direct effect on PacifiCare members. They also do not relate to UnitedHealthcare's California health plans or UnitedHealth Group's Medicare plans. PacifiCare had identified and disclosed to the regulators many of the issues raised in their examination findings prior to the audit process. As a result, the Company already had made progress resolving many of the issues before the examination findings were presented.
"We have already taken, and continue to take, aggressive steps to address the issues raised by the departments and to improve operational performance and service in California. We are committed to delivering access to high-quality, affordable health care in California, and we take seriously our responsibility to work effectively with physicians, hospitals and regulators to achieve that," said David Hansen, Chief Executive Officer of UnitedHealthcare, Pacific Region. "We have conducted a top-to-bottom review of PacifiCare's operations, procedures and policies and are working closely with state regulators to ensure that we resolve any outstanding performance issues, in part through Corrective Action Plans submitted to both departments."
The majority of the DMHC exam findings occurred in PacifiCare of California's Point-of-Service (POS) products, which cover 60,000 people out of a total of 1.25 million PacifiCare of California Health Maintenance Organization (HMO) members. The CDI findings relate largely to the PacifiCare Life and Health Insurance Company's Preferred Provider Organization (PPO) business, which covers 130,000 members of a total 860,000 people served by UnitedHealth Group in PPO plans in California.
Some of the issues raised by the departments occurred as a result of a provider network transition, which had to be completed six months earlier than originally anticipated, following the merger of UnitedHealth Group and PacifiCare. Importantly for its health plan members, during that transition PacifiCare increased its statewide network by more than 9,000 physicians and 21 hospitals. However, the transition also resulted in some provider reimbursement accuracy and timeliness issues, which, for the most part, were addressed and corrected during 2007.
"We recognize that the pace of the transition may have resulted in some physicians and other care providers experiencing inconsistent service in the past," Hansen said. "The steps we are taking in California are part of a broader, national effort to deliver better service to all stakeholders that has yielded notable success so far, and we intend to continue to improve our service."
The Company's Actions:
UnitedHealthcare has taken the following steps to address the departments' findings:
* The processing errors involving POS claims, which were the primary focus of the DMHC exam findings, are largely resolved. The Company also is making good progress on ensuring the timely and accurate resolution of provider disputes.
* A majority of the claims payment issues identified by the CDI have been resolved, and systemic changes have been made to help avoid issues in the future.
* The Company is adding approximately 50 full-time employees in California to address issues related to claims processing and data entry, provider dispute resolution and resolution of provider claims. The Company has also centralized POS claims processing at PacifiCare's Cypress, Calif., headquarters.
* We have hired a Vice President of Transactions Oversight, a new, senior position to oversee the systemic improvements we are making and independently monitor performance from Cypress.
* Additional steps taken include: 1) re-reviewing POS claims; 2) ensuring accurate interest was paid on claims; and 3) implementing new policies and procedures aimed at: improving contract loading; increasing claims reimbursement timeliness and accuracy; and reducing provider disputes and member appeals.
The steps taken now in California are part of a broader effort to make sure UnitedHealthcare (including its PacifiCare business) is providing access to quality, affordable health care and the best possible service to its customers, physicians and other care providers.
Hansen added: "While there is a theoretical maximum penalty, we believe the Commissioner will take into consideration the fact that the vast majority of the violations were administrative in nature and did not result in harm to our members. For example, over 80,000 of the noted violations were related to not sending providers an acknowledgement letter for claims received. However, the majority of these claims were paid on time."
Great strides have been made in improving service to UnitedHealthcare's customers and physicians over the last year. UnitedHealthcare has dramatically improved claims-payment accuracy, which exceeded 99 percent in the fourth quarter of 2007. Call quality also continues to improve, with first-call accuracy in the fourth quarter of 2007 up 40 percent year-over-year for consumers and 60 percent year-over-year for physicians. Customer satisfaction on post-call surveys was approximately 90 percent last December, reflecting the strengthened integrated service approach the Company now takes.
About UnitedHealthcare
UnitedHealthcare (www.unitedhealthcare.com) provides a full spectrum of consumer-oriented health benefit plans and services. The company organizes access to quality, affordable health care services on behalf of more than 26 million individual consumers, contracting directly with more than 560,000 physicians and care professionals and 4,800 hospitals nationwide to offer consumers broad, convenient access to services nationwide. UnitedHealthcare is one of the businesses of UnitedHealth Group.
About UnitedHealth Group
UnitedHealth Group (NYSE:UNH) is a Fortune 50 diversified health and well-being company dedicated to making health care work better. Through its family of businesses, UnitedHealth Group serves more than 70 million individuals nationwide. Visit www.unitedhealthgroup.com for more information.
Forward-Looking Statements
This press release may contain statements, estimates, projections, guidance or outlook that constitute "forward-looking" statements as defined under U.S. federal securities laws. Generally the words "believe," "expect," "intend," "estimate," "anticipate," "plan," "project," "will" and similar expressions, identify forward-looking statements, which generally are not historical in nature. These statements may contain information about financial prospects, economic conditions, trends and uncertainties. We caution that actual results could differ materially from those that management expects, depending on the outcome of certain factors. These forward-looking statements involve risks and uncertainties that may cause UnitedHealth Group's actual results to differ materially from the results discussed in the forward-looking statements. Factors that could cause results to differ materially from the forward-looking statements include the amount of fines and penalties, if any, actually levied by the California Department of Insurance as a result of its examination of the Company's PacifiCare health plans.
Contacts
UnitedHealthcare
Tyler Mason, 714-226-3530
tyler.mason@phs.com
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