Lawmakers, nurses and doctors on Thursday renewed claims that UnitedHealth Group can’t be trusted with a virtual monopoly on health care coverage in Nevada that would be formed by its proposed $2.6 billion acquisition of Sierra Health Services.
The critics, led by Assembly Speaker Barbara Buckley, D-Las Vegas, cited an announcement by California regulators last week that UnitedHealth could face up to $1.3 billion in fines for 130,000 payment violations by its PacifiCare unit, which it acquired in January 2006.
“Prenuptial promises can only be checked after the wedding and our problem is that’s too late,” Larry Matheis, executive director of the Nevada State Medical Association, said at a news conference. “This record says that the prenuptial promises in the past haven’t been kept once the wedding has been consummated.”
UnitedHealth spokesman Tyler Mason said the majority of the violations in California were “administrative in nature” at PacifiCare and were not a result of the merger in that state. Other major issues had to do with not paying doctors on time and “had nothing to do with patient care,” he said.
A maximum penalty of $10,000 applies to each violation, which include wrongful denials of covered claims, incorrect payments, lost documents and delays in handling claims, according to California Insurance Commissioner Steve Poizner.
The maximum fine will apply only if authorities prove all the violations and show they were planned. A final decision on the fines is likely months away pending the outcome of further hearings and the company’s response, a spokesman for Poizner said.
Nevada Insurance Commissioner Alice Molasky-Arman approved UnitedHealth’s buyout of Sierra in August, but it was conditioned on that deal going through by Feb. 29, among other agreements.
Following the California announcement, Gov. Jim Gibbons said he had renewed concerns about the deal in Nevada, adding that “far too many Californians were negatively affected by the PacifiCare and UnitedHealth merger.”
The U.S. Justice Department and Nevada’s attorney general are examining antitrust issues and may file a lawsuit before the end of the month to block the deal in this state, attorney general spokeswoman Nicole Moon said Thursday.
“If we do something, we’d do it before then,” Moon said.
According to figures backed by Buckley and others against the deal, UnitedHealth could control more than 94 percent of Clark County and 80 percent of all of Nevada’s commercial health care market if the merger went through.
UnitedHealth disputed those figures, saying the combined companies would cover only the 36 percent of Nevadans who are eligible for Medicare and who choose to purchase more comprehensive health insurance from private insurers. The rest have opted just to use the public Medicare system to cover their expenses.
Buckley argued that still means the two companies would have a monopoly on the commercial segment of the market.
“The market is the market,” Buckley said Thursday. “I don’t care what excuses they offer, where they try to claim it’s not their fault that other companies left.”