The Los Angeles Times, NYT, WSJ, and FT all report that New York Attorney General Andrew Cuomo is suing UnitedHealth Group for fraudulently overcharging customers by underpaying out-of-network doctors in a decade-long, “industrywide scheme.” State officials are leading the way—again—on issues that the federal government’s regulators have neglected.
Says the NYT:
The investigation, which raises issues that doctors’ groups and some other critics have brought up, is likely to place greater scrutiny on health insurers. And it comes at a time when the industry is reporting big profits but the rising cost of medical insurance has left an estimated 47 million people uninsured in the United States.
“The larger issue is health plans make an awful lot of money,” said Sheryl R. Skolnick, a health care analyst for CRT Capital Holdings in Stamford, Conn. If insurers are found to have underpaid, she said, they could end up having to make big restitutions to consumers.
The WSJ, FT, and NYT each have prominent stories on News Corporation’s discussion with Yahoo, as the Internet company tries to fend off Microsoft’s unsolicited $41 billion takeover bid. News Corp. would give Yahoo several of its online properties including MySpace plus an unspecified amount of cash for a stake of at least 20% in the company, the Journal says. The Times and the Journal, though, both say it looks increasingly likely that Microsoft will succeed in its bid.
The Journal reports that bankers are, shockingly enough, trying to get the federal government to bail out—ahem—back stop refinancing by subprime borrowers. A Credit Suisse plan proposes that the FHA guarantee refinancing for some 600,000 mortgages worth about $89 billion.
CEO Sam Zell announced up to 500 layoffs at Tribune Company as ad sales continued to plunge. The Chicago Tribune says ad revenue was down more than 10 percent in January, a dire scenario for a company whose debt load is keeping it barely above water. Zell rationalizes that the layoffs will flatten the bureaucracy, making Tribune more agile.
In economic news, Bloomberg reports that the Fed’s slashing of interest rates over the last several weeks has done nothing to lower the cost of borrowing for many companies and consumers.
The Journal says the surprise January retail-sales gain reported Wednesday may not mean much, in part because it reflected higher gas prices. It also reports a consumer-confidence measure plunged to a fourteen-year low:
The Los Angeles Times says existing-home sales in Southern California fell to the lowest level ever recorded by one measure that goes back twenty years. Nearly one in four of those that did sell were ones that had been in foreclosure.