United "FraudCare"


According to MSNBC, United HealthCare just paid $50 million to settle New York Attorney General Andrew Cuomo’s claims that United HealthCare manipulated its own proprietary pricing database to set an unreasonably low “fair market value” for medical care. By doing so, it is alleged that UHC forced its insureds to pay more out of pocket costs when using “out of network” providers – to the tune of tens of millions of dollars.

No criminal actions have been filed, but class action lawsuits are reportedly already in the works.

Other insurers are in the sights of several state Attorneys General.

A New York Times article about the suit and the basis behind the suit is here.

Also some interesting discussion going on at Newsvine.com.

The question I have is … with a company that has revenues of $45 billion, is a $50 million settlement enough to dissuade similar actions in the future?

That’s like a person who makes $100,000 per year agreeing to pay a fine of $100 – not exactly a big hit in the pocketbook.

Instead, why not disgorge all of UHC’s revenues for a couple of years? How about a fine of $50 billion instead of $50 million?

I can’t think of a better example of a corporate “never event” – can you?

If providers shouldn’t be paid for things that should “never” occur, neither should the insurers.


  1. This is my biggest beef with the entire health insurance industry. As providers we are forced to sign contracts to obtain reimbursement & then held to unreasonable fee schedules & ‘rules’ or standards. Medicare’s following in these footsteps by starting this competitive bidding program (crappy euphamism, IMO). Yet there’s no accountability on the payor??? Give me a friggin break! This is only one of the areas of healthcare that Obama needs to focus on.

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  3. When the penalties bear no relation to the activity they are supposed to discourage, they will be ineffective. At this rate UFC can be caught for the same thing every year in every state and still only pay out about 1/2 of 1% of revenues.

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