Insurance company sues California commissioner

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UnitedHealth Group has now filed a lawsuit with the intention of blocking a fine of $173 million.

unitedhealth insurance companyIn order to try to stop itself from having to pay a $173.6 million fine as a result of an acquisition that went awry, the UnitedHealth Group insurance company has now sued the California insurance commissioner.

The filing of the lawsuit was at the Orange County Superior Court near the end of last week.

According to the insurance company, which is headquartered in Minnesota, the California commissioner, Dave Jones, is doing little more than abusing his power. They also claimed in the filing that the commissioner’s actions could set a dangerous precedent by laying down such a strong punishment for violations that could be considered to be relatively minor.

Regulators in California have said that the insurance company filed over 900,000 violations following the acquisition.

According to the state regulators, the largest health insurer in the country, UnitedHealth, has committed in excess of 900,000 violations following its takeover of PacifiCare, which occurred in 2005. At the same time, UnitedHealth has agreed that the acquisition of the Cypress based company did not proceed as they had intended. They have admitted to a series of mistakes in everything from applications from customers to the processing of health claims.

The decision from the insurance department was made on June 9, and said that the fine that it was charging to the insurer “appropriately reflects the gravity of PacifiCare’s offenses and provides the necessary deterrent effect going forward.” A spokesperson for the department, Byron Tucker, said that they had not yet had enough time to completely review the lawsuit that UnitedHealth had filed against them.

Equally, Tucker did state that “Commissioner Jones carefully applied the law, and the department is confident the penalty will withstand the lawsuit.”

This is not the first time that the insurance company has been slapped with a fine in California. In 2010, the state sought a penalty of almost $10 billion against that health insurer. That record breaking fine, however, did not stand, as an administrative law judge determined, in 2013, that the coverage provider should face a fine that was no higher than $11.5 million.

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