United Healthcare Insurance Co. and Travelers Insurance Co. said last week they would pay $9.7 million and $10.9 million, respectively, to resolve civil whistleblower charges related to their activities as Medicare intermediaries from 1988 to 2000. They allegedly falsified expense reports to obtain higher reimbursement and performance incentives to which they were not entitled. Travelers, now owned by Citigroup and out of the health insurance market, allegedly kept two sets of books. When United, a subsidiary of UnitedHealth Group, took over the fiscal-intermediary contracts in 1995 the company "engaged in the same fraudulent billing practices," the U.S. attorney in New York alleged. Both companies settled without admitting guilt. Travelers spokesman Bob Nolan said the company denied any wrongdoing in the case. United Healthcare officials had not returned calls for comment at deadline.
Study shows insurance cost gap
Group health insurance for an individual was nearly twice as costly as individual coverage bought on the market, according to a study released earlier this month by the Kaiser Family Foundation and eHealthInsurance. Group health insurance premiums averaged $3,383 per year for individual coverage in 2002, compared with an average premium of $1,786 per year for coverage bought in the individual market. One reason for the premium difference is that younger, healthier people are more likely than others to buy policies in the individual market.
Cigna turns loss around
Cigna Corp., Philadelphia, posted a second-quarter profit earlier this month, reversing a year-earlier loss. In the three months ended June 30, the insurer reported net income of $515 million, or $3.67 per share, compared with a net loss of $53 million, or 38 cents per share, in the year-ago quarter. Revenue remained unchanged at $4.63 billion, while enrollment fell 17% year over year to 10 million.