Private firm wins contract to continue state insurance work

Thursday, June 25, 1998 | 11:32 a.m.

CARSON CITY -- UICI, the Texas company hired to bail the state health insurance program out of its problems, is getting a four-year contract to continue its work.

The state Committee on Benefits Wednesday selected UICI of Irvine, Texas, to pay the medical insurance claims from doctors, hospitals and other health professionals who treat state workers and their dependents.

UICI will continue to be paid $13.15 per month for each person covered by the state policy. There are an estimated 26,000 state workers and dependents who have the policy.

UICI won out over American Benefit Plan Administrator of Las Vegas in competition for the contract. Sierra Health Care Options, also of Las Vegas, withdrew its proposal for the state's business.

The insurance system's problems started in 1997 when the benefits committee hired L & H Associates to process the claims of employees for medical services. It fell behind and was then fired, leaving more than 85,000 unpaid claims.

UICI was hired on an emergency basis to clear up the backlog and some hospitals and doctors were not paid for up to a year.

UICI reported it is now paying claims within 10 working days from when it receives them. But it still has a small backlog that should be cleaned up shortly.

State Budget Director Perry Comeaux, a committee member, said, "They (UICI) made some real progress."

Comeaux said many of the medical providers and employers were not entirely happy with the way UICI handled the transition from L & H.

"It ended up a bigger problem than anticipated," Comeaux said.

But he said nobody wanted to go through the problems again of switching companies. UICI, he said, agreed to make improvements and stiffer penalties if it doesn't meet its performance standards.

While the Texas company received a four-year contract, the State of Nevada Employees Association, a union of about 4,400 state workers, plans to ask the 1999 Legislature to change the system.

It wants a full-scale state agency paying the claims rather than farming the business out to private industry.