New York State Attorney General Andrew Cuomo says he is investigating allegations that some health insurers have tried to defraud consumers by manipulating reimbursement rates.
Cuomo charged that Ingenix Inc., Eden Prairie, Minn., a health care billing company, is at the center of a plan to manipulate the data that most major health insurers use to set reimbursement rates for out-of-network medical expenses.
Cuomo said he has issued 16 subpoenas to health insurers.
Cuomo said he also plans to file suit against Ingenix; the corporate parent of Ingenix, UnitedHealth Group Inc., Minnetonka, Minn.; and 3 of Ingenix’s sister companies — United HealthCare Insurance Company of New York Inc., United Healthcare of New York, Inc. and United Healthcare Services Inc.
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A 6-month investigation by Cuomo’s office found that some UnitedHealth units using Ingenix data significantly underpaid members for out-of-network medical expenses, Cuomo said.
Many health plan contracts permit members to receive some reimbursement from the plans for out-of-network care.
Plans typically say the out-of-network reimbursement amount will be a set percentage, such as 80%, of the “reasonable and customary” fee for the care provided.
By distorting the “reasonable and customary” fee rate, health insurers were able to keep reimbursements artificially low and force patients to absorb more of the costs, Cuomo alleged.
“Getting insurance companies to keep their promises and cover medical costs can be hard enough as it is,” Cuomo said. “But when insurers like United create convoluted and dishonest systems for determining the rate of reimbursement, real people get stuck with excessive bills and are less likely to seek the care they need.”
In one case, Cuomo said, UnitedHealth claimed the typical doctor visit cost only $77 but knew that the typical cost was really $200.