Insurer pays $1 million fine for violating agreement with state

Catherine Cortez Masto

Catherine Cortez Masto

UnitedHealth Group Inc., owner of the Health Plan of Nevada insurance company, will pay a $1 million fine for violations of an agreement with the state, Attorney General Catherine Cortez Masto announced Thursday.

Masto said the company, based in Minnetonka, Minn., engaged in prohibited acquisitions of customers of Fiserv Nevada Inc.

This acquisition activity was prohibited by UnitedHealth’s deal with the state in 2008 allowing it to acquire local health insurance giant Sierra Health Services Inc., Masto said.

UnitedHealth also owns the Southwest Medical Associates clinics and the Senior Dimensions Medicare plan locally.

“We are pleased to have resolved this matter from 2009. While we disagree with the allegations because UnitedHealth Group did not acquire an interest in, or engage in a joint venture with Fiserv Nevada, we felt it was important to reach a mutual agreement on this issue so we can move forward with our positive working relationship with the Nevada Attorney General’s office and continue to focus our efforts on providing quality service to our Nevada customers,” UnitedHealth said in a statement Thursday.

Masto said that in early 2008, Fiserv Nevada, a company owned by Fiserv Inc., helped its customers, comprised of various large employers in the state, administer the health care benefits those employers offered to their employees.

When the Attorney General’s office was investigating the UnitedHealth/Sierra transaction, UnitedHealth announced it would also be purchasing the health-related businesses of Fiserv, including Fiserv’s Nevada-based customers. Since the UnitedHealth/Fiserv transaction would reduce competition in the state, the state required assurance at the time that UnitedHealth would not acquire or merge with Fiserv Nevada, Masto said.

Masto said that despite that prohibition, UnitedHealth acquired, through a series of assignments, all but one of Fiserv Nevada’s active customers and acquired or controlled all of Fiserv Nevada’s employees and even its office space, equipment and data.

“As a result of these efforts, Fiserv Nevada ceased to do business, as demonstrated by Fiserv Nevada surrendering its license to perform third party administration of insurance in the state of Nevada,” Masto’s office said in a statement.

“Through my office’s 2008 antitrust law enforcement action, United was permitted to acquire its local competitor Sierra,” Masto said. “But the United/Sierra transaction was subject to many strict conditions. One condition was that United could not acquire another local company, Fiserv Nevada, given our competitive concerns in 2008. Based on investigating United’s compliance with this condition, we have concluded United failed to deliver on its promises to us regarding Fiserv Nevada.”

Business

Share