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October 27, 2009 at 08:00 PM
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.”
