In a move being hailed as opening a new era in healthcare transparency, it was announced last week that a new database and accompanying Web site will collect and disseminate health insurance company physician reimbursement rates. The information is expected to allow patients to know in advance what insurers will cover for out-of-network healthcare services in their area.
The database and Web site will be operated by a new not-for-profit company known as FAIR Health, which is an acronym for Fair and Independent Research. The company's formation will be paid for by almost $100 million collected from insurance companies by the New York attorney general's office in settlements stemming from Andrew Cuomo's investigation into their use of the Ingenix database. Cuomo's office said Ingenix' database used “skewed” rates to determine out-of-network fees resulting in 10% to 28% underpayments to patients.
The company's research network will be headquartered at Syracuse University, but will also include Cornell University, the State University of New York at Buffalo, SUNY Upstate Medical University and the University of Rochester. It will be led by Deborah Freund, a professor of public administration at Syracuse University.
The company's interim board chairman will be Stephen Warnke, a New York-based lawyer who is a partner at Ropes & Gray. Other board members are: NancyMarie Bergman, a cancer patient and employee of the Bells Nurses Registry and Employment Agency; Zachary Carter, a partner with the law firm Dorsey & Whitney; Michael Dowling, president and CEO of the North Shore-Long Island Jewish Health System; Peter Millock, a partner with the law firm Nixon Peabody; Nancy Nielsen, the immediate past president of the American Medical Association and senior associate dean at SUNY at Buffalo; Sara Rosenbaum, health policy department chairwoman at George Washington University; John Rowe, former chairman and CEO of Aetna; and Patrick Soon-Shiong, executive chairman and CEO of Abraxis Health.
Nielsen said the company should be up and running “within the year,” and noted how the use of the Ingenix database had a corruptive effect on reimbursements and on the healthcare system as a whole. “It drove a wedge between patients and their doctors because patients thought their doctors had gouged them,” she said. “There will be transparency about how the data are collected and there won't be any rigging as clearly there was when it was owned by an insurer.”
Nielsen also is a former chief medical officer for Independent Health, which paid $475,000 in a related settlement with Cuomo earlier in the year, but said she had nothing to do with Independent's use of the Ingenix database or its billing practices and noted that she was involved in the AMA's 10-year legal battle regarding the database.
“I’ve been integrally involved in this since the AMA filed a suit exactly a decade ago,” Nielsen said. “It was stalled in the courts until the attorney general took this on as a consumer issue. Consumers were being taken advantage of.”
Ingenix is a subsidiary of UnitedHealth Group and a comment from UnitedHealth's CMO was included in the news release from Cuomo's office. “We have long believed that better information will enable consumers to make sounder, more informed decisions about their healthcare,” said Reed Tuckson, executive vice president and chief of medical affairs and a former AMA senior vice president for professional standards, in the release. He added that UnitedHealth stands ready to work with FAIR Health “on an expeditious transition of the database so that it will be able to develop its own methodology and launch the new database as soon as practicable.”
In a separate release, UnitedHealth said: “We are pleased that Attorney General Cuomo has established the nonprofit FAIR Health to develop and administer a new national database of physician charges and educational tools aimed at giving individuals and healthcare professionals greater access to information regarding physician charges and greater control over their healthcare. We were the first health company to step forward in support of the attorney general's initiative to create this independent database and to increase the flow of information to healthcare consumers.” UnitedHealth made the biggest contribution to FAIR Health with a $50 million settlement payment, and Nielsen said it has also agreed to reimburse patients some $350 million.
Cuomo's news release also included a written statement from Nancy-Ann DeParle, the White House director of the Office of Health Reform, who is quoted as saying “knowledge is power,” but consumers are “too often unable to penetrate the secrecy and bureaucracy of insurance companies.”
Nielsen said she didn't believe Cuomo's announcement was timed to coincide with healthcare reform issues being introduced in Congress since his investigation predated the reform debate. “The time for reform is now,” Nielsen said. “But I don't think this was set to be announced to influence healthcare reform since it's been going on for such a long time.”
A version of this story initially appeared in this week's edition of Modern Healthcare
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