New York's attorney general has picked up a battle on behalf of consumers that the American Medical Association and others have failed to win for providers over the way insurers use billing data to set what they pay for out-of-network services.
New York Attorney General Andrew Cuomo on Feb. 13 announced an "industrywide" investigation into an alleged scheme in which he believes insurers have manipulated reimbursement rates via health information firm Ingenix. Cuomo said in a news release that he plans to file a lawsuit against Ingenix and its parent, UnitedHealth Group, as well as three New York insurers that are UnitedHealth subsidiaries.
Rates calculated as "usual, customary and reasonable," or UCR, for out-of-network services in the Ingenix database have been dialed down in order to keep reimbursements low, shifting a higher burden to patients, said Linda Lacewell, who heads Cuomo's healthcare industry task force. Cuomo's office has subpoenaed documents from 16 other insurance companies regarding member complaints, communications with Ingenix and how rates are calculated.
"Our investigation has revealed that Ingenix is nothing more than a conduit for rigged information that is defrauding consumers of their right to fair payment," Lacewell said during a news conference.
Also present for that event was AMA President-elect Nancy Nielsen, who said "the circumstances suggest that the practice of using skewed UCR amounts is widespread in the health insurance industry."
In fact, this is an issue that has been roiling the provider community a long time, and the AMA in 2000 filed an antitrust and racketeering lawsuit against UnitedHealth in the U.S. District Court in New York, arguing that the rates rip off doctors, too, by holding down provider reimbursements. The case is still pending.
UnitedHealth issued a written statement saying the company is cooperating with Cuomo's office and disputing his characterization of the numbers. "The reference data is rigorously developed, geographically specific, comprehensive and organized using a transparent methodology that is very common in the healthcare industry."
America's Health Insurance Plans, meanwhile, responded that Cuomo's investigation is actually revealing that providers are gouging their out-of-network patients. "At a time when the costs of medical services soar above inflation every year, health insurance plans' tools and techniques are mitigating the damage done to consumers and employers," AHIP President and Chief Executive Officer Karen Ignagni said in a written statement.
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