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Industry: Basic Premise of Cuomo's Rate-Scheme Investigation Questionable

Atlantic Information Services reprints an article from Health Plan Week on Attorney General Andrew Cuomo's ongoing investigation into health plans' use of "usual and customary rates" to pay for out-of-network care:

A six-month investigation into rate-setting practices of health plans uncovered "a scheme to defraud consumers," New York Attorney General Andrew Cuomo (D) asserted at a highly publicized Feb. 13 press conference. While results of the investigation quickly earned praise from provider and consumer groups, and could lead to similar probes in other states, industry observers said the attorney general uncovered little more than the strategy behind having provider networks.

. . .

Contractually, the health coverage is linked to the in-network status of providers, explains Sara Rosenbaum, a law professor at George Washington University School of Public Health. "I must say I am at a loss to understand the investigation," she tells HPW.

. . .

According to Karen Ignagni, president and CEO of industry trade group America's Health Insurance Plans, cost-containment strategies used by health plans have helped to keep soaring coverage costs in check. The results of the New York investigation, she asserted, "failed to address the appropriateness of charging out-of-network patients $200 for 'simple doctor visits' lasting '15 minutes,' which equates to a billing rate of at least $800 an hour," she said in a prepared statement.

Rosenbaum says she agrees with Ignagni. "There is no point to paying full charges for out-of-network use; it completely misses the point of having networks and preferred providers. I think the investigation is lacking in basic understanding of modern insurance products, which depend on networks and which provide little coverage for out-of-network use."

Read the full article here.


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This page contains a single entry from the blog posted on February 29, 2008 9:23 AM.

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