A unit of UnitedHealth Group--the biggest health insurer--faces up to $9.9 billion in fines in California for allegedly mishandling medical claims and other abuses, notes CNN Money.
According to the California Department of Insurance, Cypress, Calif.-based PacifiCare violated state law nearly one million times between 2006 and 2007 after it was bought by UnitedHealth, reports CNN Money.
The state is seeking the maximum penalty of $10,000 for each violation, said department spokesman Ioannis Kazani.
The potential $9.9 billion fine would be the largest of its kind, according to the National Association of Insurance Commissioners. Yet, if enacted, the fine will likely be much less, Los Angeles Times reports.
PacifiCare is also accused of failing to make payments in a timely manner, losing thousands of patient documents, failing to pay doctors what they were owed and ignoring calls to fix the problems, according to the Times.
"This is about intentional disregard for the interests of doctors, hospitals and patients in California, and the pursuit of cutting costs at any means possible," Adam Cole, the insurance department's general counsel, tells the Times. "It's a story of intense corporate greed," he says.
The insurance giant is refuting the state's accusations. "The allegations concerning claims processing by PacifiCare are simply not true," PacifiCare spokeswoman Cheryl Randolph tells the Times. "By all objective measures, PacifiCare pays its claims timely and accurately," she says.
A decision on the case is expected as early as October.
To learn more:
- read the CNN Money article
- read the LA Times article