UnitedHealth must pay $500M more in hep C case

After a jury found UnitedHealth negligent for not properly overseeing a doctor who infected two patients with hepatitis C and ordered it to pay $24 million in damages, it now says the insurer must pay an additional $500 million in punitive damages.

The case, which was decided by a jury in Nevada state court, is the first to hold an insurer responsible for a doctor's actions. The jury decided UnitedHealth's units, Health Plan of Nevada and Sierra Health Services, should have known that gastroenterologist Dipak Desai was allegedly using unsafe practices to perform colonoscopies.

The plaintiffs' lawyer Robert Eglet recommended that the jury order UnitedHealth to pay almost $2.5 billion in punitive damages--a record amount that he said would send a message to companies that they shouldn't put profits ahead of patient safety. Instead, they imposed a $270 million fine on HPN and a $230 million fine on Sierra Health, reported the Associated Press.

"The jury sent a strong message not only to HPN and Sierra Health, but to every HMO and health insurance company in this country," Eglet said. "You've got to provide a fair and responsible reimbursement rate to medical providers so that they are able to provide quality healthcare to their insured members."

He hopes the verdict will compel insurers to increasingly scrutinize their networked doctors and hospitals, ensuring they provide quality care. "Insurance companies make hundreds of millions of dollars and patients still don't get the kind of care" to which they are entitled, Eglet told Bloomberg.

UnitedHealth, however, said it would appeal both the original verdict and the punitive damages, saying it "has no grounding whatsoever in reality." UnitedHealth spokeswoman Cheryl Randolph told Reuters the insurer shouldn't be held liable for one doctor's actions.

"This was an extreme case where you had a rogue physician," she said. "He went out of his way to hide this not only from us and every health plan that he contracted with in addition to the federal government and other agencies. ... It was a very isolated situation."

Randolph added that the verdict could lead to higher costs for consumers without improving patient safety. "It sets a dangerous precedent because it extends direct responsibility for an unrelated doctor's medical malpractice on health insurers, which can directly threaten the affordability of healthcare," she said. "That's obviously a big concern for us."

To learn more:
- see the Associated Press article
- check out the Bloomberg article
- read the Wall Street Journal article
- read the Thompson Reuters article