United Healthcare 2008 Annual Report Download - page 19

pharmacies and two mail service facilities as of December 31, 2008. Prescription Solutions processed
approximately 295 million adjusted scripts in 2008 by servicing internal customers such as UnitedHealthcare,
Ovations and AmeriChoice as well as external employer groups, union trusts, managed care organizations,
Medicare-contracted plans (Part D, SecureHorizons and Evercare), Medicaid plans and TPAs, including mail
service only and carve-out accounts.
Prescription Solutions’ integrated PBM services include retail network pharmacy management, mail order
pharmacy services, specialty pharmacy services, benefit design consultation, drug utilization review, formulary
management programs, disease therapy management and adherence programs. Prescription Solutions’ products
and services are designed to enhance clinical outcomes with reduced costs for those served. The fulfillment
capabilities of Prescription Solutions are an important strategic component in serving commercial health plans
and Medicare-contracted businesses, including Part D.
Prescription Solutions’ distribution system consists primarily of health insurance brokers and other health care
consultant-based or direct sales. In addition to PBM services, Prescription Solutions’ Consumer Health Products
division delivers diabetic testing and other specialized medical supplies, over the counter items, vitamins and
supplements directly to members’ homes.
GOVERNMENT REGULATION
Most of our health and well-being services are regulated by federal and state regulatory agencies that generally
have discretion to issue regulations and interpret and enforce laws and rules. This regulation can vary
significantly from jurisdiction to jurisdiction. Federal and state governments continue to enact and consider
various legislative and regulatory proposals that could materially impact certain aspects of the health care system,
including proposals to address the affordability and availability of health insurance and to reduce the number of
uninsured individuals. The interpretation of existing laws and rules also may change periodically. New laws,
regulations and rules, or changes in the interpretation of existing laws, regulations and rules, could negatively
impact our business. We believe we are in compliance in all material respects with applicable laws, regulations
and rules. In the event we fail to comply with federal and state regulations, or fail to respond quickly and
appropriately to health care reforms and frequent changes in federal and state regulations, our business, financial
condition and results of operations could be materially adversely affected. See Item 1A, “Risk Factors” for a
discussion of the risks related to compliance with federal and state government regulations.
Federal Laws and Regulation
We are subject to various levels of federal regulation. Ovations and AmeriChoice Medicare and Medicaid
businesses are regulated by CMS. CMS has the right to audit performance to determine compliance with CMS
contracts and regulations and the quality of care being given to Medicare beneficiaries. Our Health Care Services
reporting segment, through AmeriChoice and Ovations, also has Medicaid and SCHIP contracts that are subject
to federal regulations regarding services to be provided to Medicaid enrollees, payment for those services, and
other aspects of these programs. There are many regulations surrounding Medicare and Medicaid compliance.
When we contract with the federal government, we are subject to federal laws and regulations relating to the
award, administration and performance of U.S. Government contracts. In addition, the portion of Ingenix’s
business that includes clinical research is subject to regulation by the U.S. Food and Drug Administration. We
are also affected by laws and regulations relating to consumer protection, anti-fraud and abuse, anti-kickbacks,
anti-money laundering, securities and antitrust.
HIPAA, GLBA and Other Privacy and Security Regulation. The administrative simplification provisions of the
Health Insurance Portability and Accountability Act of 1996, as amended (HIPAA), apply to both the group and
individual health insurance markets, including self-funded employee benefit plans. HIPAA requires guaranteed
health care coverage for small employers and certain eligible individuals. It also requires guaranteed renewability
for employers and individuals and limits exclusions based on preexisting conditions. Federal regulations
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