Ohio State Law Backs Health Insurance Groups’ Silence on Probe, Settlement

Details about allegations that two of Ohio’s largest health insurers paid independent agents to steer government entities to their plans cannot legally be released even though the companies have paid settlements to end a state investigation, insurance regulators say.

Other states have demanded public apologies and were able to pursue multimillion-dollar payments in similar alleged schemes because different laws applied, the Associated Press account said.

The agents were hired by governments and other public entities such as school districts to find the best price on health insurance, and the state accuses United HealthCare and Anthem Blue Cross and Blue Shield of paying the agents at the same time.

The names of the agents, the affected governments and the amounts of the payments must be kept secret under state law giving the state regulators authority to investigate, Ohio Insurance Director Ann Womer Benjamin said yesterday.

Settlements in other states fell under antitrust laws that allow larger damages and more disclosure, and evidence in Ohio’s cases didn’t fall under those laws, the Ohio Director said. Antitrust cases involve cooperation between supposedly competing companies to fix prices.

Confidentiality is a needed trade-off to get information from private companies, she added.

The ability to investigate and collect data and information from companies, I believe, would be impaired if everything we collected were public by law, Womer Benjamin said.

The state agreed to accept $30,000 in administrative charges, including the $5,000 cost of the investigation, from Anthem in April and a $125,000 penalty plus $50,000 for investigative costs from United HealthCare in February. Neither company admitted wrongdoing.

The settlement acknowledged that Anthem said it was not aware the agents had private contracts with the public clients. United HealthCare has said it has already implemented new company policies under the settlement.

Some details of the United HealthCare case became public because of a hearing in the license revocation of one agent. The state delayed its announcement of the two settlements until it had presented its case in the hearing of Columbus broker Kevin Grady, according to the insurance department.

The state is asking the hearing officer to demand that Grady repay $137,000 that Columbus Public Schools paid him to find the best insurance deal while at the same time United paid him $517,000 over four years for selling its products to the district.

The department should provide similar documentation for all the allegations against the two companies, said Birny Birnbaum, director of The Center for Economic Justice, a Texas consumer advocacy group that focuses on insurance.

The most significant part of the settlement was to ensure a change of corporate behavior that will affect agents and consumers statewide, Benjamin said. The companies agreed to write policies and procedures for agents to adhere to Ohio ethics laws.

She said the case is unlike the $153 million settlement announced in March involving kickbacks alleged against Zurich American Insurance Co. The payment was reached using several states’ antitrust laws and includes millions in penalties and investigation costs for the three lead states.

Publicity over the Zurich case led Ohio to do a systematic review of insurance practices, which led to the recent settlements, Womer Benjamin said. More cases are being negotiated and could be announced in coming months.