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Cuomo to Sue UnitedHealth and Ingenix For "Manipulating Reimbursement Rates," Calls Ingenix a "Conduit For Rigged Data"

From the AG's website:

Attorney General Andrew M. Cuomo today announced that he is conducting an industry-wide investigation into a scheme by health insurers to defraud consumers by manipulating reimbursement rates. At the center of the scheme is Ingenix, Inc., the nation’s largest provider of healthcare billing information, which serves as a conduit for rigged data to the largest insurers in the country.

Cuomo also announced that he has issued 16 subpoenas to the nation’s largest health insurance companies including Aetna (NYSE: AET), CIGNA (NYSE: CI), and Empire BlueCross BlueShield (NYSE: WLP), and that he intends to file suit against Ingenix, Inc, its parent UnitedHealth Group (NYSE: UNH), and three additional subsidiaries.

The six-month investigation found that Ingenix operates a defective and manipulated database that most major health insurance companies use to set reimbursement rates for out-of-network medical expenses. Further, the investigation found that two subsidiaries of United (the “United insurers”) dramatically under-reimbursed their members for out-of-network medical expenses by using data provided by Ingenix.

Read the AG's press release here. Updates, including HPA's statement and NY news coverage, are below the fold.

Update at 12:30p: Headline corrected.

Update at 3:22p: HPA Has released a response:

The New York Health Plan Association (HPA) today responded to the Attorney General’s investigation into reimbursements for out-of-network providers saying he should look at how doctors determine what they charge versus only looking at how health plans determine payments.

“Transparency is a two-way street,” said Paul F. Macielak, president and CEO of the New York Health Plan Association. “While patients indeed have a right to expect fair and accurate payment for services promised by health insurers, they should have an equal right to know what their doctors are charging.”


The response is not yet available at HPA's website.

Update: at 3:39p: The Wall Street Journal is first out with coverage:

Linda Lacewell, who heads Cuomo's healthcare industry taskforce, accused UnitedHealth of telling an "outright lie" to consumers by claiming it based rates on information from across the country. She characterized the Ingenix database as "garbage in, garbage out," with insurers sometimes manipulating data before submitting it.

Ingenix doesn't provide a single audit of the information received or make sure it is fair or right, even though the business used the information to set rates for consumers, according to Lacewell.

UnitedHealth, in a statement, said it is using dependable database tools, with reference data that are "rigorously developed, geographically specific, comprehensive and organized using a transparent methodology that is very common in the heath care industry." UnitedHealth said it is in ongoing discussions with Cuomo's office and will continue to cooperate fully.


Read the WSJ article here.

Comments (3)

DOCTORS' TAKE ON INGENIX: With Lowered UCR,
Patients Tend to Forgo Needed Treatment Considering it Unaffordable

If AG Cuomo’s suspicions are correct, this is just one example of billions of
travesties that occur every single day in the US. As a family dentist in East
Hampstead, New Hampshire, and a Dental Examiner for the North East Regional
Board of Dental Examiners, Founder of IADMD, an organization for doctors of all
disciplines that honor the Hippocratic oath—not the bottom line of powerful
interests, there is waste and there is deception shortchanging every
policyholder's wallet and it needs to end. Americans who need health care and
make sacrifices in their quality of life to afford to pay for insurance should
not be cheated or deceived by their insurers. For hard working payers of
insurance, IADMD's plan can avert deceptions and place policyholders facing
problematic situations in recovery. The IADMD doctor-led universal health care
plan recommends allowing
unbiased teams of two physicians and two dentists from the association to stand
before insurance commissioners in every state, to oversee and stop problems
before they happen, and to intervene and correct when they are found to have
gone awry. How else do we begin to recover from this and from like situations
happening in parallel? We do so by asking legislators to listen to IADMD, by
bringing dentists and physicians together to become a vital part of the
insurance regulatory process. When insurers request their all-too-frequent rate
increase proposals and their numbers for usual, customary and reasonable
services (UCR) to state insurance commissioners, we let IADMD provide a voice on
behalf of optimal patient-care and intervene on inappropriate rate increases and
lowered UCR requests which put insurance profits before patient-care and
affordability. As patients tend to go with what is covered as opposed to a
doctor's preferred treatment of choice, in this example of possible
inappropriately lowered UCR, patients tend to forgo the treatment considering it
unaffordable. Besides these allegations there is much more debris that has to be
cleaned up, and I will help Andrew Cuomo and others in any form as I am needed
to help pick up the pieces of a shattered bureaucracy and assist in building a
more responsive to patient-care United States for every individual and without
socialized medicine—promoting the way to do this is by bringing doctors back in
charge of medicine —for the United States stay the leader in the world of health
care—NOT succumb to following other nations! As I remain dedicated to promote,
protect, and advance human life, with a message to put health care back in the
hands of doctors, I will help you in any way possible and welcome your
questions.

John J. Ryan, DMD
Phone: (603) 382-7675
www.iadmd.org
e-mail: DrJohnJRyanDMD@iadmd.org
IADMD® Mission: Dedicated to promote, protect, and advance human life, our mission is to
put health care back in the hands of doctors

A simple solution to end this health insurance abuse is have the states regulate the health insurance industry just like a public utility is regulated.

This will rein in the obscene profits made by the insurance industry taking advantage of the vulnerability of sick Americans.

How does one deal with an eight hundred pound Gorilla that misbehaves and denies coverage for your medical bills?

Patsy Bates found out when a California court awarded her 9 million dollars for damages.

Her insurance carrier, Health Net cancelled coverage just when she needed breast cancer treatment.

Her lawyer, William Shernoff, not only read the book, he wrote the book: "Fight Back and Win: How to Get HMOs and Health Insurance to Pay Up".

Bravo for LA City Attorney Delgadillo and New York City Attorney General Andrew Cuomo for going after the health insurance industry for fraudulent practices such as cancellation for pre-existing conditions and underpayment for
out-of-network doctor bills.

To read more:
http://jeffreydach.com/2008/02/24/fighting-the-abusive-practices-of-health-insurance-companies-by-jeffrey-dach-md.aspx

Making Your Health Insurance Company Pay Up by Jeffrey Dach MD

Jeffrey Dach MD
http://www.drdach.com

Paul Gillan:

Dr. Ryan:When insurers request their all-too-frequent rate increase proposals and their numbers for usual, customary and reasonable services (UCR) to state insurance commissioners, we let IADMD provide a voice on behalf of optimal patient-care and intervene on inappropriate rate increases and lowered UCR requests which put insurance profits before patient-care and affordability.Insurance commissioners do not review or approve UCR. If you think they should, be prepared to turn over all of your billing data to the insurance department statisticians (meaning billed and collected, not just stated charges).

Dr. Dach:A simple solution to end this health insurance abuse is have the states regulate the health insurance industry just like a public utility is regulated. This will rein in the obscene profits made by the insurance industry taking advantage of the vulnerability of sick Americans.
The health insurance industry is already heavily regulated. In New York, HMOs answer to two regulatory agencies in addition to the attorney general. All health insurance contracts are filed with the department, as are the rates charged under those contracts. I'm not sure what "regulated just like a public utility" means, but it can't be far off from where we are right now.

As to "obscene profits," there are such things as not-for-profit insurers (I happen to work for one) and so, for at least some in the industry, charges of obscene profits as an industry-wide disease rings rather hollow. And in any case, "obscene" is subjective. Some might regard a $2 million hospital CEO salary as obscene (I don't necessarily, although it could be).

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This page contains a single entry from the blog posted on February 13, 2008 11:41 AM.

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