HMO exec files whistle-blower suit
Delays in payment were deliberate, says fired United Healthcare official.
Susan Lundine   Senior Staff Writer
TAMPA -- United Healthcare of Florida delayed paying certain medical claims, alleges a former executive with the company.

In a whistle-blower lawsuit filed against the insurer in Hillsborough County Circuit Court, Wade Harper, former vice president of operations for United Healthcare's Gulf Coast Division, claims his former employer intentionally evaded state laws requiring prompt payment on uncontested medical bills. Among the specific allegations
 

a.. Harper contends United Healthcare used a computer program to deny valid claims, and to improperly lower the amount of money paid to hospitals and doctors, a controversial practice known as downcoding.
 

b.. According to the suit, the managed care company did not record the receipt of questionable bills, a practice that allowed it to deny claims by claiming the bills were not filed in a timely manner.
 

c.. Harper's suit also alleges that the insurer adopted procedures designed to slow down payment of big-money claims, and that the company made the appeals process "unduly burdensome for providers in order to avoid paying claims."

Harper contends he was fired after complaining about the practices to Fred Dunlap, former president of United Healthcare of Florida.

Dunlap has since resigned, but, according to the lawsuit, his response to Harper's complaints was that United Healthcare was "compliant and pristine."

"Rather than correcting the practices Harper complained about, United fired him," says Jonathan Alpert, the Tampa attorney representing Harper.

"It is the first time a high-ranking HMO employee has blown the whistle in Florida," he says. "It's also significant in terms of the kinds of practices being used to make money, which my client objected to."

United Healthcare officials declined to comment. But, in a 1999 interview with Orlando Business Journal, Dunlap defended United's record of payment, pointing out that "certainly some claims get snagged because they are missing information ... there is an ebb and flow to any business. But there is no intentional delay going on."

Slow and downcoded payments have been a thorny issue for Florida physicians and hospitals -- one reason both are expected to monitor this case closely.

"If (Harper) succeeds, it will have a big imapct on the industry and might encourage other employees to do the same," says Bill Bell, general counsel for the Orlando-based Florida Hospital Association. "It would certainly confirm hospitals' suspicions about late payments."

In 1998, managed care companies owed hospitals in Florida $569.7 million for almost 400,000 medical claims, according to the association. About 34 percent of the claims were more than 4 months old -- the time frame within which HMOs must pay uncontested claims to avoid a financial penalty.

That same year, hundreds of complaints were lodged with the state Department of Insurance about slow payments from United. In response, United created 250 new billing, enrollment and claims jobs.

But the complaints grew to include questions about a controversial software used to screen doctors' bills, as well as allegations that United was underpaying some doctors for complicated office visits.

Two months after the allegations surfaced in an Orlando Business Journal article, United agreed to dramatically cut back on the use of the software.

By then, the state's Department of Insurance had agreed to a request made by the Florida Medical Association, a 17,000-member physicians group, for an investigation of United's payment practices.

The Florida Hospital Association formally has notified the state agency of Harper's civil suit.

Notes Department of Insurance spokeswoman Nina Bottcher, "Many allegations made in the lawsuit are under investigation as part of our market conduct exam of United Healthcare, and we're not done with that yet."

But Harper's attorney says the state would do well to examine the lawsuit, which underscores what he calls "a dramatic intersection of expectations."

"Patients expect good medical treatment. Doctors expect to get paid for providing the treatment. And HMOs expect to make money," says Alpert. "That seems to be a fundamental conflict."