More on the incredible United Healthcare/Golden Rule story that Joe Paduda’s been following. Joe’s latest is called Who is UHC’s customer?
Essentially United’ high deductible subsidiary Golden Rule is advertising that it’s selling a HDHP with agreed procedure rates for customers—just like the vast majority of PPOs out there. But when the time comes, they are contractually allowing their providers to balance bill the customer over and above the rates they’ve agreed. The real kicker is that are keeping that fact secret from their customers because—absolutely incredibly—they claim it’s a trade secret between plan and provider. So they tell the customer that they’re buying into a network with pre-negotiated rates, but it’s not true. This is pretty much straight fraud.
Sadly, Golden Rule has been a scumbag organization since day 1. It was started by Patrick “looney” Rooney and its goal has been to change the law so that it can sell more of its highly underwritten, high margin HDHP policies. After numerous contributions to certain Republicans, who lets face it couldn’t give a rat’s arse about the poor consumer despite all their high fallutin rhetoric about 21st century health care, the HSA is now the law of the land and plans like Golden Rule (as well as one hopes somewhat more ethical ones) are very hot.
So hot that managed care companies decided (as I’ve said before) that acquisition rather than imitation is the sincerest form of flattery. UnitedHealth Corporation bought Golden Rule for $500m in 2003 when the HSA law was passed. Rooney meanwhile moved onto better things like buying basically reverse racist anti-Kerry commercials on black radio stations in the run-up to the 2004 election.
In a Businessweek article last year United said that it had cleaned up Golden Rule’s scummier practices:
Soaring demand is one reason why UnitedHealth paid $500 million in 2003 for Golden Rule, of Lawrenceville, Ill., problems and all. Since 1995, Golden Rule has faced 15 investigations by insurance officials for aggressive sales tactics and questionable marketing. That compares with just nine investigations at UnitedHealth, though Golden Rule’s revenues barely equaled 3% of UnitedHealth’s 2003 revenues. At its low point, in 2002, Golden Rule settled for $660,000 a nine-state investigation that found its small-group policies required employees to submit "proof of good health," a violation of federal health-care rules. In addition to the payment, Golden Rule agreed to make "substantive" changes in the way it does business in those states.Since taking over Golden Rule, UnitedHealth has made further strides. Complaints against the outfit have dropped by more than half. And as UnitedHealth expands Golden Rule, it is encouraging consumers to check health-care costs via its online "treatment cost estimator" so they aren’t surprised by big out-of-pocket bills. "When we acquire a company, we take responsibility for all their past conduct," says Mark F. Lindsay, UnitedHealth’s vice-president for communications and strategy.
Apparently you have to now actually have the double secret “treatment cost estimator” which tells you what your balance billing exposure is on top of the secret negotiated rate
All of which goes to show that you can take these trash plans out of the trailer park — into the big respectable corporation — but you can’t take the trailer park trash out of the plan. (With apologies to THCB readers who live in trailers). And of course the problems they bring with them may just spread over to the rest of the organization—which since 2004 seems to be back-sliding on its “be nice to providers” mantra with nasty little episodes in Arizona and New York.
Then again given the charges filed against Brocade’s CEO for backdating stock options and the virtual certainty that after their screwing around with the dating of option awards they are next on the SEC/DOJ hit list, it may just be that instead of sorting out this mess United’s senior management has got, ahem, other things on its mind.