The California Supreme Court says it won’t review a lower court’s decision last year that set the stage for Minnetonka-based UnitedHealth Group paying a $91 millionfine to the state’s insurance commissioner.
In September, an appeals court ruled in favor of California regulators in their attempt to impose fines on a UnitedHealth subsidiary called PacifiCare related to more than 900,000 alleged violations of state law on insurance claims.
After the ruling, UnitedHealth said it would appeal the matter to the California Supreme Court, but the court late Thursday said it would not review the case.
“I am delighted the Supreme Court has rejected further challenges to the insurance commissioner’s authority to punish insurance companies for knowingly harming even one consumer,” said Dave Jones, the California Insurance Commissioner, in a statement on Friday.
UnitedHealth Group on Friday did not immediately provide a statement in response.
In 2005, UnitedHealth Group acquired PacifiCare for $9.2 billion in a deal that was one of the biggest health plan mergers at the time. Two years later, UnitedHealth Groupofficials acknowledged in an unusual public confession that the company had forced new technology and business practices too quickly in new markets such as California, resulting in “physician resentment, network disruptions and operational overload.”
UnitedHealth pledged to pay claims faster and repair relationships with doctors, and the California Medical Association told the Star Tribune in 2010 that PacifiCare seemed to have solved problems. The California Department of Insurance in 2008 filed an enforcement action against PacifiCare, alleging the insurer engaged in multiple unfair claims settlement practices and other violations of the insurance code. Following a hearing, the insurance commissioner found PacifiCare engaged in over 900,000 acts and practices in violation of the code.
“Customers have no choice but to rely on the integrity of their health insurance companies,” Jones said in a statement. “PacifiCare breached that trust.”
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