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Empire State Firm Gains Clout Over Repricing

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Power to influence what health plans pay out-of-network doctors and hospitals may be shifting from the Midwest to upstate New York.

New York Attorney General Andrew Cuomo today announced the birth of FAIR Health Inc., a not-for-profit, New York state company that is supposed to replace the health care price data service operated by Ingenix, Eden Prairie, Minn.

Ingenix, a unit of UnitedHealth Group Inc., Minnetonka, Minn., has been supplying the data most health plans use to calculate “reasonable and customary” rates for providers outside their networks. Providers and patients have argued that Ingenix keeps the prices in its database artificially low, to hold down claim reimbursement costs.

New York regulators responded by spending more than a year investigating health plans that used the Ingenix price data. Earlier this year, Cuomo began to announce a series of settlements with the Ingenix users. He argued that any health price service paid by health plans would have a built-in conflict of interest, and he required the settling health insurers to contribute a total of $100 million in settlement money to create a nonprofit Ingenix alternative.

UnitedHealth agreed to provide $50 million in financing for the Ingenix alternative, and to stop selling its Prevailing Health Charges System and Medical Data Research database products once the new, nonprofit service introduces a replacement database.

The Ingenix alternative, FAIR Health, will be based in upstate New York and form an alliance with Syracuse University, Cuomo said today at a press conference.

Cuomo, a Democrat who is widely believed to be running for governor in 2010, said operating the health price database will make FAIR Health “a center for health care research and an engine of health care reform.”

The State University of New York at Buffalo, Cornell University, the University of Rochester and the State University of New York Upstate Medical University will all get to handle some of the health price database work, Cuomo said.

Syracuse Mayor Matthew Driscoll said Syracuse University will be the hub for a transformation of the health care system.

“Upstate New York will become the national leader in providing vital health data,” Driscoll predicted.

Traditionally, because of antitrust concerns, confidentiality concerns and other concerns, Ingenix limited access to its health price data. Ingenix and its customers have been making more pricing data available to the public in recent years, and FAIR Health and Syracuse University will create a consumer health price database, officials say.

UnitedHealth wants to help FAIR Health get up and running as quickly as possible, according to Dr. Reed Tuckson, UnitedHealth’s chief medical officer.

“We have long believed that better information will enable consumers to make sounder, more informed decisions about their health care,” Tuckson says.


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