United Healthcare not only the biggest, but also the baddest

Hospital executives rank United Healthcare as the worst insurance company in the United States.

According to a survey conducted by Davies Public Affairs, 113 hospital executives -- representing 500 hospitals -- gave United low marks for image, reputation, reimbursement rates, contract negotiations, honesty and claims approval.

But the poor rating wasn't the most important discovery in the survey, said Davies CEO Brandon Edwards.

"The striking thing is that United was not the largest payer in terms of revenue for the average hospital, and its reimbursement rates were not significantly lower than other major payers," he said. "All insurance companies are big, and most are regarded as tight-fisted by providers. But the survey indicates that United takes things to a different level: providers see them as untrustworthy and dishonest. This was an unexpected finding."

The survey, the only one of its kind in the country, targeted hospital leaders who negotiate contracts with major health insurance companies -- chief executive officers, chief financial officers and directors of managed care.

"A full 91 percent of those surveyed indicated an unfavorable opinion of United Healthcare," according to the survey. "This compares with an average unfavorable rating of 41 percent of all other insurers in the survey."

A survey conducted during 2007 showed similar results, Edwards said.

"Eight-seven percent of participants ranked United as 'difficult' or 'very difficult' to deal with," he said.

But United disagrees with the findings.

"It's a little too narrow," said Cheryl Randolph, spokeswoman for the UHC. "While we welcome productive evaluations from our customer and network providers we are disappointed that this narrow survey, with its nonscientific methodology, fails to fairly represent the good relationships United Healthcare has with most hospitals. We do hear from our customers and network providers about specific improvements that can be made to our systems. We take productive recommendations seriously and we act to implement them."

As one of the largest health insurance companies in the United States -- and the largest in Colorado -- United pays more than 20 million claims each month, Randolph said.

"And 82 percent -- more than 10 points higher than the industry average -- of the 20 million monthly claims are processed automatically," she said. "Ninety-five percent of all the claims are paid within 10 days."

Randolph said the company works with hospitals to improve the accuracy and speed of electronic claims submissions and payments, and the company increased its dollar accuracy on claims payment to more than 99 percent during the fourth quarter of last year.

Customer satisfaction on post-call surveys was about 90 percent during December, Randolph said.

"Call quality also continues to improve," she said. "First-call accuracy in fourth quarter 2007 is up 40 percent year-over-year for consumers and 60 percent year-over-year for physicians."

United wasn't the only health care insurer to be rated.

The survey gathered information from hospital leaders about the six largest health insurers: United, Cigna, Aetna, Coventry/ FirstHealth, Wellpoint/Anthem, and local or regional independent nonprofit Blue Cross and Blue Shields plans.

Participants were asked to rate insurance companies in more than a dozen categories -- from image to reputation to detail contract negotiations and processing issues.

While United was the biggest insurer -- with 96 percent of hospitals saying they used the corporation -- state and regional Blue Cross and Blue Shields were the highest revenue producers. Hospitals executives said state and regional Blue Cross companies represented 22.43 percent of their revenue. United accounted for 16.12 percent and Wellpoint represented 16.67 percent.

But in every category, United ranked worst among the major payors. Respondents said United had the worst reputation for dealing with hospitals, prompt payment and reducing paperwork. The company also was listed as the worst to deal with in contract negotiations and had the worst reputation for honesty and candor.

The results of the survey aren't surprising, said Steve Berkshire, a professor in the School of Management at Regis University.

"Hospitals typically have an adversarial relationship with third- party carriers," he said. "And carriers like United have a typically more adversarial relationship than other carriers. United is typically more aggressive on not only their rates, but on how they decide if something is medically necessary."

And because the company represents such a large number of people, United is able to demand more from hospitals.

For example, negotiations between HealthOne in Denver and United took a rough turn during 2006, Berkshire said. After months of public fighting, attack ads and a lawsuit, the two groups managed to agree to a four year contract.

Health One -- which includes seven Denver hospitals -- said that United wanted a higher reimbursement rate. The fight led to a temporarily severed relationship, Berkshire said.