UnitedHealth Group Inc., which bought Cypress-based PacifiCare Health Systems in 2005, has taken a few blows from patients, regulators and doctors.
The insurer’s efforts to change its image and perception were chronicled in a recent Wall Street Journal article.
Minneapolis-based UnitedHealth, the second-largest health insurer in the U.S., “has become a lightning rod for sometimes scathing complaints from patients, healthcare providers and state regulators, a problem exacerbated in the past two years by its difficulties integrating major acquisitions,” the newspaper said.
Critics and analysts named the PacifiCare deal, as well as UnitedHealth’s 2004 buy of New York’s Oxford Health Plans, for much of the negative perception of UnitedHealth, according to the Journal.
“In the competitive commercial managed-care market, these service issues are taking a toll, as some of UnitedHealth’s employer-customers have gone elsewhere, commercial enrollment has declined and state agencies have launched probes of claims-related practices,” the article said.
Earlier this year, California regulators said they planned to seek fines against UnitedHealth that could potentially exceed $1 billion for alleged mishandling of claims and data at PacifiCare. The regulators said the allegations included “unfair” pre-existing condition coverage denial and a “meltdown in its claims paying process.”
UnitedHealth has said that it had more work to do with PacifiCare. But otherwise service levels have recovered to what it called “market performance levels.”
The company said it’s worked during the past year to improve overall service, forge ties with doctors’ groups and mend its image.
UnitedHealth was a-ware that its service wasn’t up to standards and “we worked very hard across this enterprise to right that,” Reed Tuckson, UnitedHealth’s chief of medical affairs, told the newspaper.
Doing Business Overseas
Medical device makers that want to do business overseas don’t just have to worry about setting up operations or exporting their products. They also have to make sure that they don’t offer anything that could be construed as a payment to foreign government officials.
A U.S. law that bars payments to foreign officials was the topic at a recent seminar co-hosted by law firm Crowell & Moring LLP’s Irvine office and the Department of Commerce. The meeting took place at Allergan Inc.’s headquarters in Irvine.
Donald Sovie, a Crowell government contract and international group partner, discussed the Foreign Corrupt Practices Act. The law’s anti-bribery provisions prevent U.S. citizens from making payments to foreign officials in order to obtain, retain or direct business.
Device makers have to know the law and comply with it, Sovie said.
“This is not an insignificant issue. You have to afford compliance,” Sovie said.
Some medical device makers that were affected by the law include Micrus Corp. of Sunnyvale,which paid $450,000 in penalties,and a Chinese subsidiary of Los Angeles-based Diagnostic Products Corp., now part of Siemens AG. Diagnostic Products paid a total of $4.8 million in penalties to the government. Both cases took place in 2005.
The law even reaches down to low-level workers at government-owned hospitals, according to Sovie.
“Most any person with a government status is a ‘foreign official,'” he said.
Brian Peck, Karen Gibbs and Amanda Paracuellos, other OC-based Crowell lawyers, also participated in the forum. Peck gave updates on exporting rules for China and India, while Gibbs and Paracuellos discussed challenges regarding distribution of medical devices overseas and possible solutions to those challenges.
Product Launch
Advanced Medical Optics Inc., the Santa Ana-based eye lens and products maker, launched a pair of products earlier this month.
Advanced Medical introduced its new Tecnis one-piece intraocular replacement lens for cataract surgery. The company showcased Tecnis at the American Academy for Cataract and Refractive Surgery’s annual meeting in Chicago earlier this month.
And Advanced Medical made its debut in the dry eye realm with Blink Tears. Blink Tears is an over-the-counter lubricating eye drop that includes a blend of ingredients that naturally occur in the eye.
Advanced Medical will be going up against several players in the dry eye market, including former parent Allergan.
Bits and Pieces:
Amerita Inc., an Irvine-based company that provides intravenous administration of medications to patients outside hospitals, said it purchased IV Solutions, an infusion pharmacy in Nashville, Tenn., for an undisclosed price UCI Medical Center, a teaching hospital in Orange, said its heart failure and stroke treatment programs were certified by the Joint Commission, a Washington, D.C.-based voluntary hospital accrediting group Hoag Memorial Hospital Presbyterian in Newport Beach named Richard Fischel medical director of thoracic oncology. Fischel, a board-certified thoracic surgeon, is going to oversee lung cancer programs at the hospital’s cancer center Irvine drug developer NuRx Pharmaceuticals Inc. said it dosed the first patient in a first-phase clinical trial of its NRX4204 drug candidate. NRX4204 will be used to target lung and breast cancers.
