Medical Mutual questions state#039;s switch

Published 12:00 am Wednesday, March 31, 2004

Company officials at Medical Mutual of Ohio in Cleveland were shocked when they found out their contract with the state was outbid several weeks ago by a Minnesota-based company, UnitedHealthcare.

Mutual executives are firm in their beliefs that the company poised to provide insurance for state employees and their families cannot deliver what they propose. Medical Mutual's contract with the state expires June 30.

"We were provided an opportunity to review the information provided by UnitedHealthcare and the bottom line is that the $28 million savings United is offering does not exist," said Sue Tyler, the chief financial officer for MMO.

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Tom Brady, the CEO of UnitedHealthcare of Ohio, disagrees with MMO's claim.

"In regards to anything that MMO has to say, my response is that UnitedHealthcare has submitted our information to the Department of Administrative Services and Watson Wyatt for their review. We have complied with any additional requests for more information," he said.

Brady said the company has health plan locations in Cleveland, Columbus and Westchester and other additional companies in the state under the other group.

The "parent" company, UnitedHealthGroup and UnitedHealthcare, are headquartered in Minnetonka, Minn.

"We've had a relationship with the state of Ohio for about 20 years on a Health Management Organization basis … this is an expansion of that relationship," Brady said.

MMO maintains that an insurance provider switch would mean that insurance claims for state workers would be processed in Missouri and customer service would take place in New Mexico.

"This is at a time when the governor is calling for the creation of jobs for Ohioans," Tyler said.

The regional director of public relations for United, Debora Spano, said people in Ohio will be designated to service the state's account and customers will be able to contact someone in Ohio.

"The administration has pulled consideration of the contract from the controlling board so we can can determine the accuracy of UnitedHealthcare savings for the state. If the statement is accurate, that is a significant amount of taxpayers dollars saved," said Orest Holubec, spokesman for Gov. Bob Taft.

The Department of Administrative Services has no current plans to conduct an independent review of United's proposal despite the fact that MMO offered to fund such a review.

United's proposal, however, is still being evaluated by the department and by a consulting firm, according to DAS spokesman, Ben Piscitelli. MMO's contract with the state expires June 30.

"We have faith in our review process and in our health care consultant, Watson Wyatt. We need to complete the review by this coming Monday when the issue goes before the Ohio Controlling Board for approval," he said, "We recently asked UHC for a few clarifications. That has generated more questions from our agency."

Tyler also said a more important issue that has gotten lost in the shuffle is the impact on state employees and what that means to the people in terms of disruption - somebody whose doctor or provider is not in United's network.

"After we delved further into the information, the results didn't jive with what we know about our marketplace. We actually called all of the hospitals and found numerous misrepresentations and errors. Some of the hospitals are willing to verify that in writing," she said.

An even greater impact could be placed on rural areas where providers are harder to find.

"People are going to be driving, changing physicians and subject to additional out-of-pocket expenses–both in the form of co-insurance and balanced billing. United cannot and does not offer the same protection in balanced billing," Tyler said.

Additionally, Tyler said with United's proposal there will be 7,200 less doctors, 22 less hospitals to include eight counties without a hospital available for state employees and their families.

"I am not sure how changes with MMO will affect our employees as I have yet to be notified of any specifics," said Kathleen Fuller, public information officer for the Ohio Department of Transportation's District 9. "We do have an open enrollment period that commences in late April and during this employees will be offered choices to their health care plans. Those who opt for various changes to their existing plans will have them go into effect at the start of the fiscal year in July."

Shawn Burcham of South Point is an ODOT project inspector for District 9. The father of two said he is pleased with his family's current health care plan.

"I haven't had any problems with the coverage and if anything at all comes up, I'm able to call them and have it promptly resolved," Burcham said.

Lawrence County has 103 people employed by the state, including agencies such as ODOT, the Ohio Department of Job and Family Services (the state employment office) and Dean Forest.

According to the Better Business Bureau's Web site, membership in the BBB is voluntary and members have to meet and maintain certain standards. Mutual is a member of the BBB and they check out favorably for customer experience on the Web site.

A BBB customer experience check was also performed for United's headquarters. The Web site reported that the company "has an unsatisfactory record with the Bureau due to complaints closed as disputed or unresolved."

Mutual has headquarters in Cleveland with more than 10 additional locations throughout the state. The company has been a health care insurer for state employees for 17 years.

The state of Ohio currently employs 42,000 people who are covered by Ohio Med. That number totals 106,000 with the inclusion of employees' dependents.