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February 17, 2008 at 02:00 PM
New York State Attorney General Andrew M. Cuomo said he is investigating an alleged plan by some health insurers “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 also said he has issued 16 subpoenas to a number of large health insurers, including Aetna Inc., Hartford; CIGNA Corp., Philadelphia; and Empire BlueCross BlueShield, New York to uncover facts about the alleged fraud. He also said he plans to file suit against Ingenix, its parent UnitedHealth Group and 3 other UnitedHealth subsidiaries.
The attorney general said a 6-month investigation by his office found that some UnitedHealth units significantly underpaid members for out-of-network medical expenses by using data Ingenix provided.
Under the insurers’ health plans, members pay a higher premium for the right to use out-of-network doctors. In exchange, the insurers promise to cover up to 80% of bill. By distorting the “reasonable and customary” fee rate, the insurers were able to keep their reimbursements artificially low and force patients to absorb more of the costs, Cuomo claimed.
“Getting insurance companies to keep their promises and cover medical costs can be hard enough as it is,” said Cuomo. “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.”
For instance, UnitedHealth claimed the typical New York City office visit cost only $77 when it knew it the cost was $200, Cuomo charged. Using the contractual repayment rate of 80% of the $77, just $62 of the $200 bill would be reimbursed, leaving the patient to cover the balance he said.
Health insurance companies that relied on the Ingenix data paid rates that “were remarkably lower than the actual cost of typical medical expenses,” Cuomo charged.
His notice to sue named UnitedHealth Group and its subsidiaries, United HealthCare Insurance Company of New York Inc., United Healthcare of New York, Inc., United Healthcare Services Inc. and Ingenix.
