UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): FEBRUARY 22, 1999
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UNITED HEALTHCARE CORPORATION
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(Exact name of registrant as specified in its charter)
MINNESOTA 0-10864 41-1321939
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
300 Opus Center
9900 Bren Road East
Minnetonka, MN 55343
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 936-1300
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N/A
(Former name or former address, if changed since last report)
Item 5. Other Events
On February 18, 1999 registrant, as part of an investor teleconference to
discuss fourth quarter 1998 results, made the following remarks:
LEGISLATIVE TRENDS
On the government affairs front, a number of health care-related items are of
particular interest to us - "Patient Bill of Rights" legislation; Medicare
program reform; and confidentiality.
Health plan liability, definitions of medical necessity, and external review
will be issues in the "Patient Bill of Rights" debate. Speculation now is that
Republicans may push for completion of a non-controversial bill. Its elements
of emergency room (prudent layperson) provisions, gag rule and designation of
ob-gyns and pediatricians as primary care doctors are already features of our
products and would not have material impact on our business.
Congressional action on Medicare will focus on two separate tracks: structural
reform based on the Medicare Commission's recommendations (due in March), and
short-term "technical" fixes to the Medicare + Choice program. For the Medicare
Commission, the addition of a drug benefit and fundamental restructuring are
issues that won't likely be seriously debated in Congress this year.
Medicare + Choice "fixes" may include adequacy of health plan payment and risk
adjustment. We suspect changes will be made to the risk adjusters in 2000.
The confidentiality debate focuses on consent, allowable uses of identifiable
health information, research use of non-identifiable and identifiable
information, and preemption of existing state laws. We support the
establishment of reasonable, uniform national standards.
The Department of Labor is continuing work on amending ERISA to establish
minimum time frames for benefit claims review procedures, with hearings this
week. It appears the DOL is re-examining the structure of key provisions. We
expect this to be less of an issue than originally anticipated.
We expect continued local activity mirroring some of the federal issues but do
not see any real impact on our own direction or operating results.
REGULATORY ACTIVITIES
We are subject, almost daily, to some form of regulatory audit, review or
inquiry. This has in fact been true for several years. We not only dedicate
considerable resource to proactive compliance efforts but to audit support and
response activities as well. This is a very normal expectation for this
industry. We do not have any matters that we believe are likely to have a
material exposure.
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REGISTRATION STATEMENT REVIEW
As I mentioned in the Salomon Smith Barney session last week, the Securities and
Exchange Commission is reviewing our Shelf Registration filing. We have not
been reviewed since 1991 and with our realignment charge and level of
acquisition activity we fully expected to be subject to a staff review. It is
not an investigation. Their review, of course, has inquired about the
realignment charge, in process R&D, goodwill amortization lives, loss contracts
and language. We have responded but the review is not complete so we can't
comment further. But we obviously believe our positions are fully supported and
appropriate. It is important to note that our auditors fully concur with these
positions as well.
LITIGATION TRENDS
Recent judicial proceedings -- very large punitive damage awards by juries and
court rulings extending liability theories -- are industry factors.
Historically, we have managed our member coverage disagreements actively,
quickly, and pragmatically. We intend to continue that approach and are hopeful
that we will continue to see satisfactory results in this area. While it is too
early to be certain, our experience with external review in the markets where we
have it today suggests this approach will help reduce the number of our member
benefit disputes that go to litigation, without significantly increasing our
medical costs.
Y2K
Our Y2K remediation efforts are definitively on schedule with 67% of our code
fully tested. Today, 12% is in testing for completion by the end of first
quarter and 16% is scheduled for sunsetting in 1999. The remaining 5% is new
code to be developed and certified in 1999. We are now focusing more of our
energies to other, related Y2K business risks. Principally, these are:
Developing key supplier contingency plans; completing PC desktop remediation;
making end user developed applications compliant; verifying facility readiness;
and finalizing risk mitigation plans.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITED HEALTHCARE CORPORATION
By /s/ David J. Lubben
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David J. Lubben
General Counsel and
Secretary
Date: February 22, 1999
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