After a firestorm of controversy over its proposal to send $36.8 million in accumulated profits to its parent company, UnitedHealthcare of New England has temporarily withdrawn its application for the “extraordinary dividend,” saying it needs time to “assess the concerns.”
“We take seriously the comments of our members, physicians and providers that were voiced” at a March 20 hearing on the request, United CEO Stephen J. Farrell wrote in a letter to Health Insurance Commissioner Christopher F. Koller.
Farrell noted that “customer service and physician reimbursement concerns” seemed to be the biggest issues, and he added that while United was already working on reimbursement issues, it has now created a task force on “physician and member satisfaction.”
United paid a $17 million dividend to its corporate parent, United HealthCare Services Inc., just over five months ago, but last month it sought permission from Koller to send an extra $36.8 million, mostly from profits that had accumulated from 1999 to 2003, when the state restricted United’s payouts to its parent.
To make the request more palatable, United offered to make a “one-time voluntary investment” equal to 10 percent of the $38.6 million payout to support Rhode Island health care and technology development initiatives.
However, that wasn’t enough to keep consumer advocates, doctors, and Gov. Donald L. Carcieri and Attorney General Patrick C. Lynch from lashing out at United.
After the request was withdrawn last week, Koller said that his office anticipates “a resubmitted application that addresses the short-term issues at hand while addressing larger local issues over the long haul.”
“UnitedHealthcare of New England has obligations not only to its clients and its shareholders, but to the people of Rhode Island,” said Koller. “We are pleased that they recognize the need to meet those obligations.”
After United’s announcement, Carcieri wrote to Farrell telling him he was “pleased to learn” about the company’s decision. “This is good news for Rhode Islanders and for the state’s health care system,” he said, adding: “I applaud you and your company for being willing to reconsider this problematic plan.”
