UnitedHealth faces $91M fine after California court's fair claims decision

The California Court of Appeal upheld regulations for fair claims settlements after a 10-year legal challenge, paving the way for $91 million in fines against a UnitedHealthcare subsidiary, the California Department of Insurance said Sept. 21.

After the ruling, the fines may be affirmed against PacifiCare for unlawful claims-handling practices, the insurance department said. The department accused the UnitedHealthcare subsidiary of wrongfully denying life-saving treatment for seriously ill members, as well as claim payment denials for providers and hospitals.

The department alleged the health insurer knew about the issues, but was focused on maximizing "profits through what it called 'efficiencies' measures after the 2005 botched $7 billion acquisition of PacifiCare by UnitedHealthcare." The agency said it found 908,000 violations of consumer protection laws.

In a statement to Becker's, the health insurer said, "This decision is in conflict with statutory and California Supreme Court precedent. If it were to stand, the ruling would harm efforts to keep escalating healthcare costs in check. We will seek California Supreme Court review and ask the Court to reinstate [a] lower court's decision."

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