St. Petersburg-based Universal Health Care stops marketing new policies

Financially struggling Universal Health Care, once among the fastest-growing companies in St. Petersburg, warned agents that it has stopped marketing its Medicare services in all areas effective immediately.

The notice, which did not include a reason, could threaten the survival of the managed care company. Universal has already been losing members after being billed as a "consistent poor performer" by the federal government, which suggested in a letter to Medicare recipients in the fall that they consider shopping around for other options.

Scrutiny over Universal's finances has been building. Regulators in two states have already cracked down. And in December, the company laid off at least 100 employees at its downtown St. Petersburg offices in part because of disappointing sales during the fall open enrollment period for Medicare. At the time, the company said it still had about 1,000 employees, 85 percent of them in St. Petersburg.

Several executives with Universal could not be reached via email or phone for comment Friday. Calls to Universal's call center were directed to chief of staff Shaun Keck, who could not be reached.

The information void triggered a wave of speculation among some current and former employees about the company's future — everything from talk that a sale is imminent to predictions it would be shuttered by regulators next month. Florida insurance regulators said no action has been taken.

The company's alert to agents late Thursday was brief:

"Universal Health Care has made the decision to stop marketing in all service areas effective immediately. To clarify, there should be no active marketing of any UHC product. Note: Until further notice, no commission will be paid for new enrollments. Please be assured that all commissions owed and renewals will be paid," the alert reads.

"Universal remains committed to providing Hassle Free healthcare to our existing membership and ensuring that our members are the number one priority."

The notice comes a few months after Georgia regulators reached a consent order with the company that halted the sale of new Medicare Advantage plans in Georgia. The insurer was still allowed to renew business and keep existing customers.

Georgia Insurance Commissioner Ralph Hudgens, who signed the consent order in November, cited the company's net loss of more than $27 million in 2011 and its loss of $22.1 million in the first six months of 2012 as the trigger. Potentially, Universal faced $45 million in annual losses if one extrapolates the first half results, he said at the time.

On Dec. 18, the Ohio Department of Insurance followed suit. The company was found in violation of state laws in reporting a net loss greater than 20 percent of its $41 million surplus for the 12 months ended Sept. 30.

In the Ohio consent order, Universal agreed to stop soliciting or issuing new policies in the state but is allowed to keep its existing customers.

The company's bid to boost sales took a serious blow when the Centers for Medicare & Medicaid Services effectively put a scarlet letter on the company in a fall mailing to its Medicare recipients.

Universal, the government said, has rated below average among Medicare providers for three years in a row. "We encourage you to compare this plan to other options in your area and decide if it is still the right choice for you,'' the letter cautioned.

The government's rating system — from 1 to 5 stars — started five years ago. Universal received a red "warning" label, which is affixed to any plan that earns fewer than three stars for drug or health benefits for three years running. Universal executives vowed to improve scores.

Founded in 2002 by Dr. Akshay Desai, Universal Health Care swelled in recent years into a provider of Medicare Advantage Health Plans in 20 states plus the District of Columbia. Simultaneously, Desai emerged as a major contributor to the Republican Party and last year was named the party's finance chairman.

This isn't the company's first fiscal crisis, however. State regulators made moves to liquidate the company in 2007, saying it had grown too quickly and signed up too many members without the necessary reserves. At the time, the company's popular "Any, Any, Any" plan — named for its promise of access to any doctor, any time, anywhere — had swelled to 75,000 members.

Desai and his company rebounded, however, and Universal was approved to resume selling coverage in February 2008. By 2010, the firm had grown to more than 400 full-time workers and moved into a downtown St. Petersburg building at 100 Central Avenue that was once earmarked for a department store that never arrived.

A recent Medicare spreadsheet indicates Universal has about 87,000 enrollees nationwide.

In the Tampa Bay area, traditionally one of its strongholds, it has dropped to 13,000 enrollees at last count, trailing competitors for the retiree market like Humana, which has 82,000 in its plans, and AARP, which has 59,000. About two years ago, Universal had nearly 18,000 local enrollees.

Florida insurance regulators said Thursday, and reiterated Friday morning, that no action has been taken against Universal. Spokesman Amy Bogner of the Florida Office of Insurance Regulation added that her office "cannot confirm nor deny the existence of an ongoing examination or investigation."

Times staff writer Stephen Nohlgren contributed to this report. Jeff Harrington can be reached at jharrington@tampabay.com or (727) 893-8242.

St. Petersburg-based Universal Health Care stops marketing new policies 01/18/13 [Last modified: Friday, January 18, 2013 10:10pm]

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