UnitedHealth Group Draws $1M Fine in NV

Margaret Dick Tocknell, June 28, 2011

UnitedHealth Group will pay a $1 million fine related to allegations that it violated restrictions placed on its 2008 acquisition of Sierra Health Services, the Nevada attorney general has announced.

Because of competitive concerns, UnitedHealth was permitted to acquire Las Vegas-based Sierra provided that it didn't acquire Fiserve Nevada, which administered the healthcare benefits of many Nevada firms.

However, that same year UnitedHealth acquired the parent company, Fiserve Health, including Fiserve Nevada and its third party administration business.

"UnitedHealth Group was permitted to acquire its local competitor Sierra," explained Catherine Cortez Masto, the state attorney general, in a press statement. "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.

The Nevada Attorney General required assurance that UnitedHealth Group would not acquire or merge with Fiserv Nevada, and placed additional restrictions on joint venture activity, which were reflected in the final approval of UnitedHealth's acquisition of the Sierra Health Services.

"Based on investigating United's compliance with this condition, we have concluded United failed to deliver on its promises to us regarding Fiserv Nevada," said Masto.

According to the Nevada attorneys general office on Friday, UnitedHealth Group engaged in the following conduct which allegedly violated the court-approved judgment of its acquisition of Sierra Health Services:

  • In 2008, United acquired, through a series of assignments, all but one of Fiserv Nevada's active customers and exerted near total control on all of these customers before the assignments occurred, which confused Fiserv Nevada's customers;
  • United acquired or controlled all of Fiserv Nevada's employees;
  • United acquired virtually all of Fiserv Nevada's other assets, including Fiserv Nevada's 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 Nevada.
Margaret Dick Tocknell Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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