Physician groups say they hope a new not-for-profit database on insurance payments to doctors will lead to fairer reimbursement for their services and lower out-of-pocket costs for patients.
The new database and accompanying Web site, announced late last month, will collect and disseminate health insurance company rates that will allow patients to know in advance what they are likely to be reimbursed for out-of-network healthcare services in their area.
The database and Web site will be operated by a not-for-profit company known as FAIR Health, which is an acronym for Fair and Independent Research, and will be paid for by the almost $100 million collected from insurance companies by the New York attorney general's office in settlements stemming from Attorney General Andrew Cuomo's investigation into their use of the Ingenix database, which Cuomo's office says used “skewed” rates to determine out-of-network fees resulting in underpayments to patients that were between 10% and 28% too low.
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 chair will be Stephen Warnke, a New York-based lawyer who is a partner with Ropes & Gray and leader of the firm's Health Care Group. Other board members are: Nancy Marie Bergman, a cancer patient and employee of Bells Nurses Registry and Employment Agency; Zachary Carter, a lawyer who is a partner with Dorsey & Whitney; Michael Dowling, president and CEO of the North Shore-Long Island Jewish Health System, Great Neck, N.Y.; Peter Millock, a healthcare lawyer who is a partner with Nixon Peabody; Nancy Nielsen, M.D., the immediate past-president of the American Medical Association and senior associate dean at SUNY at Buffalo; Sara Rosenbaum, health policy department chair at George Washington University; John Rowe, M.D., former chairman and CEO of Aetna; and Patrick Soon-Shiong, M.D., executive chairman and CEO of Abraxis Health.
Nielsen says the company should be up and running “within the year,” and notes 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,” Nielsen says. “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.”
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Ingenix is a subsidiary of UnitedHealth Group, and a comment from UnitedHealth's chief medical officer was included in the new release from Cuomo's office. “We have long believed that better information will enable consumers to make sounder, more informed decisions about their healthcare,” says Reed Tuckson, M.D., 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 says: “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 says the insurer has also agreed to reimburse patients some $350 million.
In addition to the $50 million from UnitedHealth, another $20 million came from Aetna, $10 million from Cigna Corp. and $10 million from WellPoint .
Nielsen is also a former CMO for Independent Health, which paid $475,000 in a settlement with Cuomo, but says she had nothing to do with her former company's use of the Ingenix database or its billing practices and notes that she was involved in the AMA's decadelong legal battle regarding the database.
“I've been integrally involved in this since the AMA filed a suit exactly a decade ago,” Nielsen says. “It was stalled in the courts until the attorney general took this on as a consumer issue. Consumers were being taken advantage of.”
Cuomo's news release also includes a written statement from White House Office of Health Reform Director Nancy-Ann DeParle who is quoted as saying “knowledge is power,” but consumers are “too often unable to penetrate the secrecy and bureaucracy of insurance companies.”
Nielsen says she doesn'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 says. “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.”
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