UnitedHealthcare of New England has withdrawn its request to send nearly $37 million in extra profits to its Minnesota parent, saying the insurer wanted to “take time to assess the concerns raised by our Rhode Island members, physicians and other providers.”

United was pilloried at a public forum on March 20 by doctors and other health-care providers who said the company reimburses too little, makes providers fight for payment, and has poor customer service.

United, which already reaped $17 million in profits in October, wanted to send an additional $36.8 million to United Health Group, its parent. The company needs state approval for this “extraordinary dividend,” and the Office of the Health Insurance Commissioner held the unprecedented meeting to get public input on the request.

But on Monday, Stephen J. Farrell, United’s chief executive officer, visited Commissioner Christopher F. Koller to deliver a letter “temporarily withdrawing” the request. Farrell’s letter said that United “take[s] seriously the comments of our members, physicians and providers” at the meeting and identified physician payment and customer service as the most important issues.

Koller, who released Farrell’s letter yesterday, said that Farrell indicated he would return with a new proposal. United did not return The Journal’s phone calls seeking comment yesterday.

Leaders of the Rhode Island Medical Society, which led the charge against United’s request, received the news with skepticism. “This is a trick,” said Dr. Barry W. Wall, medical society president. “They have done this for years and years. … They will make a promise — they will not follow through on that promise. This is just more of the same. We hope that Mr. Koller just sees right through it.”

Before learning of the withdrawal, the medical society and seven other provider groups wrote a letter to Koller, urging him to reject the dividend request and saying that United’s Rhode Island-based leaders “no longer have credibility or standing in Rhode Island as a result of United’s persistent pattern of corrosive business practices and its failures to make itself a contributing member of our community.”

Wall questioned why United would need time now “to address the concerns we’ve been raising for years and years and years.” He speculated that United might simply want time for the uproar over its profits to quiet down.

But Dr. Margaret A. Sun, president of the Rhode Island Academy of Family Physicians, reacted more optimistically. “I think it’s fantastic,” she said. “I’m looking forward to finding out what they’re going to do and how they’re going to use some of this money to help us.”

Sun said she was pleased that providers and consumers finally had a chance to voice their frustrations with United in a public forum.

Insurers have long needed state approval for extraordinary dividends (defined as profits that exceed either 10 percent of the insurer’s surplus or the net income from the insurer’s operations in the previous year). But in the past the process has been confidential, and chiefly concerned with protecting insurers’ solvency. The 2004 law that established the Office of the Health Insurance Commissioner changed the focus, adding an emphasis on how such actions affect the health-care system as a whole.

Koller said that three themes emerged at the public meeting, and he would expect United to address them in any new request: that primary-care reimbursement rates are too low; that services to providers need improvement; and that United should invest in efforts that improve the efficiency and effectiveness of the health-care system at a level “commensurate with its size and the investments of others.”

Nothing requires United to act on those issues. But the insurer needs Koller’s approval to take away the $37 million, now in a low-interest account. Koller can reject such a request if it conflicts with the commissioner’s mandate to protect consumers, ensure insurer solvency, encourage fair treatment of health-care providers, and improve the health-care system.

Even if United decides not to re-submit its request for extraordinary dividends, the company will have to face the commissioner on several other regulatory matters, and Koller will press the same issues in those cases, said his policy aide, Matthew Stark.

“The law is clear,” Koller said. “UnitedHealthcare of New England has obligations not only to its clients and its shareholders, but to the people of Rhode Island.”

Koller noted that he welcomes United’s presence in the state, because competition among insurers can be beneficial, as long as they’re competing over the quality of their services rather than who can pay providers less or who can attract the healthiest patients. “As a community,” Koller said, “we are better off with two insurers, or more, competing based on fair rules.”

Blue Cross & Blue Shield of Rhode Island and United are the only Rhode Island-based health insurers serving the commercial market. A third insurer, the nonprofit Neighborhood Health Plan of Rhode Island, covers only people on the state Medicaid program.

“I think they felt a lot of heat,” said Stan Israel, vice president of District 1199 of the New England Health Care Employees Union, which had also objected to the dividend. “I’m not at all surprised. It will be interesting to see what they come back with — if they come back.”

Alan Tavares, executive director of the Rhode Island Partnership for Home Care, said he was pleased when a reporter told him about United’s decision. But then he noted, “Nothing’s accomplished. The money’s sitting there.”

United had offered to spend 10 percent of the $36.8 million on programs for the chronically ill and statewide efforts in health information technology, but speakers at the meeting called the 10 percent too little.

Governor Carcieri yesterday issued a statement praising United’s decision to withdraw its request and urging the company to spend its extra profits on higher reimbursements to primary-care physicians and donations to help develop health-information technology in the state.

ffreyer@projo.com