New Lawsuit Alleges Unitedhealth/Pacificare Deceived Cancer Patient

PR Web Newswire ^ | November 18, 2006 | Law Offices of Robert K. Scott

[SBD1]

New Lawsuit Alleges Pacificare Set Course Of Deception To Avoid Claims and Cancel Policy of 34 Year Old Kidney Cancer Patient To Increase Company Profits.

Irvine, CA (PRWEB) November 18, 2006 -- UnitedHealth Group, the nations second largest health insurer, and its subsidiary Pacificare of California were named in a lawsuit yesterday for canceling the health insurance policy and refusing to pay medical bills after a cancer patient sought treatment. (D'ANNA vs PACIFICARE OF CALIFORNIA #GIN057028)

The lawsuit was filed in the Superior Court of San Diego by attorneys Robert K. Scott and Scott Mahoney of the Irvine-based Law Offices of Robert K. Scott. The lawsuit adds UnitedHealth Group and Pacificare of California to the growing list of California insurers who have been accused of revoking health care polices after patients get sick.

UnitedHealth Group Inc recently announced a 38% jump in its third-quarter earnings, aided by gains from last years PacifiCare acquisition. Recent revelations of a "conflict of interest" have been reported at the DMHC during hearings on the merger between UnitedHealth and Pacificare in California.

"I was repulsed when I learned that the CEO of UnitedHealth Group had 1.6 Billion in stock options while I am being harassed by collection agencies for the medical bills Pacificare refused to pay", said Salvatore D'Anna, the Plaintiff in the lawsuit.

According to the lawsuit filed yesterday, UnitedHealth Group and Pacificare of California allegedly failed to properly manage the patient's cancer treatment and withheld information that put his life in jeopardy to avoid the cost of a second surgery to remove his kidney because of remaining cancer reported in his Pathology report.

Pacificare allegedly withheld the coverage decision for the second surgery until the patient flew across the country for the procedure. Submitted documents indicate Pacificare informed the patient the day before the surgery that they were denying coverage which forced the patient to ask his parents to loan him $25,000 for a down payment on the surgery. When the patient returned home, instead of offering to pay for the surgery, Pacificare allegedly sent a letter that purported to cancel the policy.

The Complaint against UnitedHealth Group and Pacificare can be read here.

About The Law Offices of Robert K. Scott (www.robertkscott.com):

For over thirty years, The Law Offices of Robert K. Scott has sued insurance companies on behalf of both individual consumers and businesses against the abuses of the insurance industry. This area of law is known as "insurance bad faith." Our goal is to vigorously fight to protect your rights and to achieve maximum results for you.

[softengine]

Now now... if you use logic and reason here on FR you will get flamed.

[El Gato]

A press release from the Law Offices of Robert K. Scott? Forgive me if I withhold judgment on UnitedHealth.

You go right ahead and withhold. They are the only choice I have with my employer. They are slime. They failed to notify me that I was going to a "non contracted" provider, even though I'd asked the provider and the referring doctor who is contracted with them. This was over a months worth of physical therapy. The claims were filed in several batches, and the first claim was filed over a week before the second visit took place. They just let me continue, rather than advising me to switch providers. I don't know just how much that cost me, but it should be on the order of $2,500. With my budget, that's a lot. The reason I don't know is that the provider has not sent me a bill for the services since being denied by UHC.

My mother didn't have good results from them either, on a totally separate program through her union and former employer. (She retired when she was my age, I'm so jealous. :) )

[SBD1]

The cost for the full body scan was around $1,000.00. I had the scan at LifeScore.

I had no symptoms at all when I had the scan and it was not performed for a "medical reason".

At my first appointment with my doctor, I gave him a copy of the written report from the scan. When I went to see the Urologist, I gave him a copy of the written report and provided him with a CD that contained 3-D Halographic images of the scan. When I had my second opinion, I sent the Cleveland Clinic a copy of the written report as well as the CD as well.

Even with the written report and CD, they requested that I have an MRI to confirm diagnosis. I never tried to hide the scan and when I gave my answers on the APP, they were truthful.

California has a law against Post-Claim Underwriting.

(H&S § 1389.3.) "No health care service plan shall engage in the practice of postclaims underwriting. For purposes of this section, "postclaims underwriting" means the rescinding, canceling, or limiting of a plan contract due to the plan's failure to complete medical underwriting and resolve all reasonable questions arising from written information submitted on or with an application before issuing the plan contract. This section shall not limit a plan's remedies upon a showing of willful misrepresentation."

Specifically, § 1365 allows insurers and HMOs to only cancel policies for "failure to pay" or "for fraud or deception."

Under § 1357.54, an HMO or insurer can only refuse to renew under an equally narrow set of circumstances: 1. An enrollee moves out of the service area; 11. The company ceases to provide insurance coverage; 111. An enrollee fails to pay the required premiums; or, IV. An enrollee commits fraud or is found to have made an "intentional misrepresentation of material fact."

The DMHC is going to review this issue.

Consumer Advocates Praise HMO Regulator for Pledging to Push for New Rules in Response to Group's Petition; Say "Devil's in the Details

SBD

[SBD1]

Risking my life for profit is not just a "difficult-to-resolve contract dispute". The doctor's follow up plan was incorrect. I was informed by strangers on an email list that this was incorrect and that I had an aggressive form of cancer. Two Oncologists and another Urologist recommended immediate removal of my kidney. I can't wait around for weeks or months for a referral to have my kidney removed while my insurance company takes it sweet time to decide on coverage.

SBD

[Walkenfree]

"This seemed odd since I won’t be eligible for Medicare until the year 2037. Since I signed up for coverage with Pacificare, I have also received an AARP card and a letter from Liberty telling me how they can deliver my Medicare drugs right to my home. Why they think I am eligible for Medicare is beyond me." (BTW,Sorry to hear of your dilemma.)
Make an appointment with your local Social Security office, to apply for Social Security Disability. They refer you to one of their Doctors, to verify your eligibility. Once determined, you are also eligible for Medicare. It used to go retroactive to date of your Doctor's initial disability determination. Medicare charges a monthly premium of $98.50 per month, and pays provider 80 percent of approved cost.

[SBD1]

Interesting you should mention that Medicare pays 80 percent of approved cost. In addition to all of the above AARP and that Medicare Plan D letter, something else happened that raised my eyebrows during this saga.

I received a bill from the hospital that said the amount due from patient was $14,900 of the $77,000 cost for the first surgery. I thought this was odd since my policy had a $5,000 yearly maximum. The letter said that my insurance company would send me a breakdown which they subsequently said they do not provide.

Anyways, I called the hospital and they told me to call the Medical Group since they paid the claim. The Medical Group initially told me to call the Hospital. When I told them that I was told that they paid the claim and therefore they made the mistake, they said they would have to confirm with Pacificare.

It was finally resolved, but I wonder how such a mistake could happen. When you apply the 80/20 payment provided by Medicare, you just happen to come up with a figure around $15,000. Add that to the AARP card I received and the attached letter that says they just can't understand why I have not joined since they know I am eligable, it makes you wonder just what is going on here??

SBD

[Hostage]

Not risky at all but terribly more efficient and effective.

The executives and 'innivators' (spelled innovators) that you defend are the middlemen who add no value to patient care.

I suggest you study and research the subject before taking a position to defend the indefensible.

[sitetest]

Dear Young Scholar,

They have every right to raise premiums, generally.

However, my contract renews annually, and used to do so in May. As provided by law in Maryland, Optimum Choice (the division of MAMSI from which we bought insurance) provided me the renewal rates in March. It takes a month or two (if you're working quickly) to change health insurance companies here, and so you're supposed to get your renewal rates in time that you have a realistic opportunity to make changes before the contract date expries.

The new rates were about an 8% increase overall. Not great, but certainly not bad at all. In early April, I approved the renewal at the new rates.

Optimum Choice then dragged its feet, failing to process the renewal on a timely basis, and as a result, on May 1, we were without health insurance, as a company. As a "favor" to me, for their not getting the renewal done on time (figure that one out), they asked whether they could put the renewal off till August 1, and just extend the old contract until then. I didn't like that option, but in that we were all without health insurance, and they were more or less in a "take it or leave it" mode ("Oh, we can get you the new contract, but it may take three or four weeks to get it all sorted out - but we could extend the old contract today"), I didn't see a problem with it.

I came to understand why they wanted to delay until August 1. By then, they'd processed enough stuff with the state insurance commissioner that they were able to drop the old plans we had, and force us into other United Healthcare plans (now relabeled with Optimum Choice's brand). These new plans represented a dramatic decrease in benefits, and a 30% increase in premiums.

The insurance company notified me of the dramatic changes on July 25, leaving us with less than a week to make any changes to other providers.

Obviously, we're switching companies, effective January 1. Beginning in August, we began looking at other options. By mid-September we'd identified other options, by early October, we'd discussed these options in general ways with our employees, and we made the decision in October which plan to switch to. We could have gotten a December 1 start-date, but because we're going with Health Savings Accounts, it's much better if we don't have a one month difference between the plan year and the calendar year.

However, in the meantime, we've suffered with dramatically higher rates and dramatic cuts in our benefits that were unilaterally imposed by United Healthcare. Personally, it cost me money in benefits denied because they played with the contract year, and because they unilaterally decreased the benefits.

Our insurance agent is looking at filing complaints withe state insurance commissioner. Where we go beyond that is up in the air.


sitetest

[Young Scholar]

That sounds pretty bad, but Health Savings Accounts definitely sound like a better plan.

[Young Scholar]

The executives and 'innivators' (spelled innovators) that you defend are the middlemen who add no value to patient care.

That sounds like a very simiplistic assumption of what these "middlemen" do. Sure, they don't directly treat patients, but without them, who will provide organization in the industry, and who will allocate resources? Hillary Clinton believes a government bureaucracy can do a better job, but do you agree? Otherwise, what's your alternative?

It's the market (complete with the possibility of enormous payoffs) that leads people to risk their own time and money on untested new treatments, and without such a reward, who would want to take that kind of risk?

The problem with the current system is not that it allows executives to make profit-maximizing decisions and reap the rewards, it's that it is (as you say) perversely designed so that these decisions sometimes have negative consequences. The solution is to reform the industry so that market forces can be relied on to maximize both profit and patient care. As other industries show us, these are not mutually exclusive goals; rather, the market is the best way to achieve both.

[Hostage]

I already posted my alternative in the first post.

By the way, your 'solution' ideas are sophomoric at best. Like I said earlier, study and research the subject before taking position.

[sitetest]

Dear Young Scholar,

It is pretty ugly. It's pretty clear that United Healthcare / Optimium Choice is in violation of state insurance regulations. The difficulty is proving that it's more than an oversight, a misunderstanding, etc.

I suspect that these guys have done this to lots of small groups, and I suspect it's because it will raise profitability in the short-term. My insurance agent tells me that these guys are doing all sorts of ugly things to all sorts of small groups in Maryland, and that United Healthcare / Optimum Choice is completely unresponsive to requests to straighten things out. These folks aren't even returning the phone calls of my insurance agent.

They're losing contracts hand-over-fist, but because lots of small groups need time to make their moves, in the short-term, they're getting lots more premium dollars for lots less benefits. It'll likely make the earnings statements of last three quarters of 2006 positively glow.

Don't ask me what will happen in 2007.

However, the difficulty in proving that this is a planned wholesale violation of state insurance regulations is that United Healthcare can just claim that they're incompetent, and all the "errors" were unwitting. Certainly, in acquiring MAMSI, they took on an organization with its own competency problems. And at least in Maryland, United Healthcare has had a very poor record of customer service for years, now. My insurance agent thinks that they'll just lay off all the "errors" to the fact that one very incompetent company acquired another (not quite as) incompetent company, and they made a hash of it.

The HSA plans we're implementing help us to keep our overall premium costs down, but that's by shifting a not insignificant burden to our employees.

It's a mess. I hate even thinking about it anymore.


sitetest

[Young Scholar]

It's pretty clear that United Healthcare / Optimium Choice is in violation of state insurance regulations. The difficulty is proving that it's more than an oversight, a misunderstanding, etc.

You could still get compensatory damages--just not putative damages--couldn't you, if their mistake cost you money?

[Young Scholar]

By the way, your 'solution' ideas are sophomoric at best. Like I said earlier, study and research the subject before taking position [sic].

Your suggestion, that customers pay the providers directly (I assume you mean through Health Savings Accounts or some similar program), would go a long way toward accomplishing my "sophomoric" proposal that the health care industry be made more responsive to market forces, by allowing customers (or patients, if you prefer) to demand a certain quality of care in exchange for their business--and move elsewhere if a provider becomes a bureaucratic mess. But without any form of insurance, who can afford the occasional massive expenses such as cancer that could otherwise bankrupt most people?

[sitetest]

Dear Young Scholar,

"You could still get compensatory damages--just not punitive damages--couldn't you, if their mistake cost you money?"

Maybe, I don't know.

The problem is that insurance law is a thing unto itself. It doesn't play out quite the same as regular contract law, because the primary governing stuff is all these regulations.

I have a passing acquaintance with business law, ERISA, etc. But because we're a small company, our health insurance isn't governed by ERISA, or regular contract law, but by our state's unique insurance regulations.

And guess what? The folks at the health insurance companies know these regulations lots better than I do, or than my insurance agent does.

As well, because we're a small company, the sum total of our damages might not be more than $5,000 or $6,000. That's mostly out of my pocket, and that's not an insignificant amount of change to me. However, I have to balance the time and effort (and potential additional hard costs, if I have to get my lawyer involved) against recovering perhaps five or six grand.

I also have a company to run, full-time.

Then, there's the fact that because we're a pretty small company, the revenue that we bring to our insurance agent isn't terribly large, and thus, my insurance agent may be reluctant to pick a fight with one of the major insurance companies left in Maryland, spending his own time and resources in a battle that really doesn't have much upside, all the way around.

It's easy to get away with theft if you only steal a modest amount of money from a large number of folks.


sitetest

[Young Scholar]

It's easy to get away with theft if you only steal a modest amount of money from a large number of folks.

True. Maybe you should contact the MD Attorney General or Insurance Commissioner--this seems like the sort of situation they're meant to handle.

[sitetest]

Dear Young Scholar,

Well, if we decide to proceed, it will be first through the Insurance Commissioner.

The difficulty is that Maryland's health insurance regulatory environment is far worse than most states, and has driven most health insurers out of the state. For small group plans, there are fewer than 10 companies available in the state. There used to be over 100.

As the number of companies has declined dramatically, so has the quality of service. The net effect on regulatory bodies is that a complaint that once would have generated outrage in the regulator's office is now considered routine and mundane.

As well, I imagine that the Insurance Commissioner, having seen the number of companies offering health insurance in our state drop by over 90%, might be wary of aggressively going after one of the few remaining companies.

The best thing for a company in Maryland to do is to completely self-insure, with minimal re-insurance on the back-end, thus getting one's plan kicked into ERISA, and out of the control of the state's regulations. At that point, you can do a lot of innovative and neat things. Unfortunately, these don't work at all with under 50 employees, and work best with over 100 employees.

HSAs are a given in that environment, but you can couple your plans with pro-active health-preservation plans, like giving preferred health insurance benefits packages to folks willing to accept and use free gym memberships, who are willing to make some effort to exercise and control diet, forgo smoking, etc.

The dirty little secret is that the ultimate cause of rising health care costs in the United States is that Americans are living increasingly unhealthy lives. I know, I'm guilty. I've been carrying around extra weight all my adult life. I took off a good bit of it about a dozen years ago, but I still have a good ways to go. As well, it is difficult for me to maintain a regular exercise program.

But only by taking more pro-active charge of our own health PRESERVATION can we truly begin to get a handle on our health care costs.


sitetest

[djreece]

My prayers are with you as you battle your cancer. Thank you for standing up for justice. I too have been battling illness this year, and my insurance company is giving me a hassle now that I am making a claim after years of paying the premiums and never having to use the coverage. The procedure was preappproved, medically necessary and clearly covered, but so far they are refusing to pay. It is unconscionable that some companies will put people who fighting for their health through additional hassles for what is rightfully ours. I am glad there are ways for those who have been wronged to fight back and hope the right thing will be done in your case.

God bless you and heal you.

[veronica]

Go get 'em. I had Pacificare for while and had a very good experience with them. But is they are trying to screw you, hold their feet to the fire.