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Insurer's finances checked

The insurance office is investigating Universal Health Care to see if it has financial reserves to cover its growth.

By Kris Hundley
Published February 13, 2007

Universal Health Care Inc. of St. Petersburg, which has attracted Medicare enrollees to its managed care plans by offering everything from zero premiums to money back, is under investigation by Florida Office of Insurance Regulation.

According to a division spokesman, state officials are concerned the privately owned insurer has grown too rapidly and does not have sufficient financial reserves as required by law.

"We have strong suspicion they may be out of line with most, if not all, of the state's solvency guidelines," said insurance office spokesman Bob Lotane. "We got word on the street that they may have sold far more than their original plan of operation or that their financials would allow them to do. And we have strong reasons to suspect that's the case."

Lotane said the state also is concerned with customer service issues at Universal, although private Medicare insurers usually are monitored by the federal government's Centers for Medicare and Medicaid Services.

"If we suspect a problem, we may send in a market-conduct investigation team to see if there are issues with their handling of policyholders," Lotane said. "We could fine them or sanction them. We're looking at all our options."

Universal's chief operating officer, Phil Sheesley, declined to comment on the state's financial investigation, which Lotane said had been under way for about two weeks. Universal's next required financial filing with the state is Feb. 25.

Universal was started by a prominent Republican fundraiser and political appointee, Dr. Akshay Desai, in 2002, and began offering Medicare plans in 2003. As of late January, the company had added 75,000 new members this year, bringing total enrollment to 115,000, Sheesley said.

In addition to offering Medicare plans in 33 Florida counties, the company added a Medicare private fee-for-service plan in eight states including Florida in 2007.

Desai financed the company's growth through his own funds and individual investors until last year, when Warburg Pincus of New York City invested $30-million in the business.

Though Desai said in late January that his company had managed its growth well, Universal has been plagued with customer complaints. People who were promised a rebate on their Medicare Part B waited months for reimbursement. Members who joined its private fee-for-service plan, which was supposed to be accepted by every doctor, sometimes found their physicians wouldn't deal with Universal. And though Universal's slogan was "hassle free health care," members often faced lengthy waits to get procedures approved.

"I had a billing problem and when I called customer service which was rerouted to India, the people sounded like robots," said Ilene M. Rainone of Clearwater.

Lotane said the state has no time line on its financial investigation into Universal and that its findings at this point are confidential.

But he said Universal's members should not be concerned about receiving their benefits. Medicare beneficiaries can switch managed care plans until March 31; after that date, they are locked into their plan for the year.

Kris Hundley can be reached at hundley@sptimes.com or (727)892-2996.

[Last modified February 13, 2007, 06:20:48]