Weekend Economists Simplify Everything! October 25-27, 2013

[Ghost Dog]

16. "Quality Software"... Hmmm... "Crony Software"?

WASHINGTON – A UnitedHealth Group Inc. subsidiary accepted partial blame Thursday for the poor initial performance of the website designed to sign up millions of Americans for insurance under the federal health care overhaul. But an officer of Minnetonka-based UnitedHealth’s Optum unit said at a congressional hearing that the company fixed its problems quickly and also warned the government about computer coding problems by other contractors...

... Thursday’s hearing was called to bring the website’s principal private contractors — Optum, CGI Federal Inc., Serco Inc. and Equifax Work Solutions — to account for their roles in the growing angst of Americans trying to buy coverage. “We understand the frustration many people have felt,” Optum Vice President Andrew Slavitt told a packed hearing room.

In 2012, Optum acquired Quality Software Services Inc., which the government paid $85 million to help build the $500 million health care website...

... Slavitt said Quality Software — known as QSSI — successfully delivered a data services hub that verifies customer information, such as citizenship, by sending computerized queries to various government databases. Where it tripped up was in the early operation of a registration and access management tool to let people establish Health.gov accounts and shop for insurance plans...

/... http://www.startribune.com/business/229192391.html

See also: http://en.wikipedia.org/wiki/UnitedHealth_Group#Legal_issues

In 2006, the Securities and Exchange Commission (SEC) began investigating the conduct of UnitedHealth Group's management and directors, for backdating of stock options. Investigations were also begun by the Internal Revenue Service and prosecutors in the U.S. attorney's office for the Southern District of New York, who subpoenaed documents from the company. The investigations came to light after a series of probing stories in the Wall Street Journal in May 2006, discussing apparent backdating of hundreds of millions of dollars' worth of stock options by UHC management. The backdating apparently occurred with the knowledge and approval of the directors...

... In June 2006, the American Chiropractic Association filed a national class action lawsuit against the American Chiropractic Network (ACN), which is owned by UnitedHealth Group and administers chiropractic benefits, and against UnitedHealth Group itself, for alleged practices in violation of the federal Racketeer Influenced and Corrupt Organizations Act (RICO)...

... In February 2008, New York State Attorney General Andrew M. Cuomo announced an industry-wide investigation into a scheme by health insurers to defraud consumers by manipulating reasonable and customary rates. The announcement included a statement that Cuomo intended "to file suit against Ingenix, Inc., its parent UnitedHealth Group, and three additional subsidiaries."...

... On January 15, 2009, UnitedHealth Group announced a $350 million settlement of three class action lawsuits filed in Federal court by the American Medical Association, UnitedHealth Group members, healthcare providers, and state medical societies for not paying out-of-network benefits...