United Healthcare 2003 Annual Report Download - page 62

60 UnitedHealth Group
Government Regulation
Our business is regulated at federal, state, local and international levels. The laws and rules governing
our business are subject to frequent change, and agencies have broad latitude to administer those
regulations. State legislatures and Congress continue to focus on health care issues as the subject of
proposed legislation. Existing or future laws and rules could force us to change how we do business,
restrict revenue and enrollment growth, increase our health care and administrative costs and capital
requirements, and increase our liability related to coverage interpretations or other actions. Further, we
must obtain and maintain regulatory approvals to market many of our products.
We are also subject to various ongoing governmental investigations, audits and reviews, and we
record liabilities for our estimate of probable costs resulting from these matters. Although the results of
pending matters are always uncertain, we do not believe the results of any of the current investigations,
audits or reviews, individually or in the aggregate, will have a material adverse effect on our
consolidated financial position or results of operations.
13 SEGMENT FINANCIAL INFORMATION
Factors used in determining our reportable business segments include the nature of operating activities,
existence of separate senior management teams, and the type of information presented to the
company’s chief operating decision-maker to evaluate our results of operations.
Our accounting policies for business segment operations are the same as those described in the
Summary of Significant Accounting Policies (see Note 2). Transactions between business segments
principally consist of customer service and transaction processing services that Uniprise provides to
Health Care Services, certain product offerings sold to Uniprise and Health Care Services customers by
Specialized Care Services, and sales of medical benefits cost, quality and utilization data and predictive
modeling to Health Care Services and Uniprise by Ingenix. These transactions are recorded at
management’s best estimate of fair value, as if the services were purchased from or sold to third parties.
All intersegment transactions are eliminated in consolidation. Assets and liabilities that are jointly used
are assigned to each segment using estimates of pro-rata usage. Cash and investments are assigned such
that each segment has minimum specified levels of regulatory capital or working capital for non-
regulated businesses. The “Corporate and Eliminations” column includes costs associated with
companywide process improvement initiatives, net expenses from charitable contributions to the
United Health Foundation and eliminations of intersegment transactions. Substantially all of our
operations are conducted in the United States.
In accordance with accounting principles generally accepted in the United States of America,
segments with similar economic characteristics may be combined. The financial results of
UnitedHealthcare, Ovations and AmeriChoice have been combined in the Health Care Services
segment column in the tables presented on the next page because these businesses have similar
economic characteristics and have similar products and services, types of customers, distribution
methods and operational processes, and operate in a similar regulatory environment, typically within
the same legal entity.