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Mar
27

United Healthcare’s workers comp history

Amidst the speculation that UHC may be buying Coventry Health comes the inevitable questions about what UHC would do with Coventry’s work comp division. A historical perspective may be instructive.
UHC has had at least three previous ventures into the work comp world over the last fifteen years, in addition to the services delivered by its Ingenix subsidiary (fee schedules, ucr databases and the PowerTrak bill repricing software). Way back in the mid-nineties UHC was in the work comp business in Florida in a big way. UHC actually accepted risk via its health plans in Florida, calculating that it could deliver lower medical coats through a more efficient delivery system.
This worked well – until the tail caught up with UHC and they subsequently lost millions of dollars.
This may have affected the company’s view of comp going forward; since the Florida fiasco UHC has assiduously avoided comp.
At one time the company owned two comp managed care entities, Focus and MetraComp ( where I labored for a few years). Both eventually ended up at Coventry, Focus via a sale to Concentra (which was in turn bought by Coventry) and MetraComp through a sale to NHR, which was then sold to Concentra.
As part of the NHR deal, United agreed to let NHR access its network contracts for three years in return for an access fee. At the end if that term NHR was on its own.
If history repeats itself, UHC would likely seek to sell off the work comp division if indeed it does but Coventry. There are already discussions going on at at least two private equity firms regarding putting together a bid for the business.
This may well be just as much an indicator of the sorry state of the M&A business as the potential attractiveness of a Coventry work comp spinoff. That said, even if UHC decides not buy Coventry there is the chance that Coventry will sell the business off itself. CEO Allen Wise has not been an enthusiastic supporter of the business, at least not publicly.


2 thoughts on “United Healthcare’s workers comp history”

  1. Didn’t they pick up some worker comp business when they bought Sierra Health/HPN in Las Vegas? I haven’t heard of them divesting anything locally.

  2. They picked up some w/c when they acquired Mamsi/Alliance. They still run a little bit through OneNet (replacement name for Alliance), but they would certainly enlarge their footprint with Cvty business.

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Joe Paduda is the principal of Health Strategy Associates

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