News: 2009 Press Release
For Release: June 10, 2009
Media Calls Only: 916-492-3566
CDI Announces That Prosecution of PacifiCare Proceeds to Administrative Hearing
Follow-up Market Conduct Examination Commenced
The California Department of Insurance (CDI) announced today that its enforcement action against PacifiCare Life and Health Insurance Company is proceeding to administrative hearing.
Last year, Commissioner Poizner filed an Accusation and Order to Show Cause against PacifiCare alleging thousands of violations of the California Insurance Code based on PacifiCare's failure to properly process claims from physicians, failure to meet its payment obligations on a timely basis, and a host of other improper claims paying practices. The alleged violations came on the heels of PacifiCare's acquisition by United Health Group, now the largest health insurance company in the United States. Since filing the Accusation, the Department of Insurance has continued to receive complaints from patients and providers about PacifiCare. A copy of the Accusation can be found by selecting this link.
"The charges against PacifiCare are very serious," said the Department's General Counsel, Adam Cole, who heads the prosecution team. "PacifiCare is entitled to defend itself against these charges, but if the charges are proved, the public is entitled to penalties commensurate with the systematic and knowing disregard of consumers' rights laid out in the Accusation."
The hearing is expected to begin later this year. It will be conducted before an Administrative Law Judge (ALJ), who will propose a decision to the Commissioner. Commissioner Poizner will make the agency's final decision following receipt of the ALJ's recommendation.
The Department also has commenced a follow-up market conduct examination of PacifiCare. An initial market conduct examination that covered the period June 23, 2006 to May 31, 2007 disclosed thousands of violations that served as the basis of the Accusation. The Department's follow-up examination will, among other things, investigate PacifiCare's claims processing practices for the periods January 1, 2006 through June 22, 2006 and June 1, 2007 through April 1, 2009.
Commissioner Poizner has worked tirelessly to protect consumers and ensure health insurance companies fulfill their obligations.
Last week, Commissioner Poizner introduced historic regulations to prevent the practice of unfair rescissions in the individual health insurance industry. These regulations marked California's first-ever regulatory steps to clarify rescission laws, preventing the industry practice of unfairly rescinding health insurance policies. Even prior to announcing the regulations, Commissioner Poizner has taken decisive action against improper rescissions since taking office in 2007, cracking down on the three largest individual health insurance companies in the state for engaging in the practice. The Commissioner established requirements within each settlement to ensure that these companies would not illegally rescind policies in the future. Poizner also worked to get offers of reinstated coverage for 4,000 customers whose policies CDI alleges were illegally rescinded.
Please visit the Department of Insurance Web site at www.insurance.ca.gov. Non media inquiries should be directed to the Consumer Hotline at 800.927.HELP. Callers from out of state, please dial 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.
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