Tuesday, January 13, 2009

We'll Tell You What's Fair, and You'll Like It!

New York Attorney General Andrew Cuomo announced a settlement today with UnitedHealth Group Inc., the nation's second-largest health insurance company, over allegations that its captive insurance data provider, Ingenix, was manipulating the billing data to help the insurer defraud millions of consumers out of legitimate reimbursements. The settlement calls for payment of $50 million by United, as well as a non-profit to take over the collection and analysis of health care billing information, which many insurance companies use to set "usual and customary" rates for various health procedures, and which Ingenix was manipulating for the benefit of its master, United and most of the other major health insurers.

Here's how the scam worked. You go to an out-of-network doctor, have some procedure done, and submit the charges to your insurance company. The company checks the Ingenix database, which tells them - surprise! - that your doctor's charges are unreasonably high (that is, not "usual and customary" (U&C)), and offers to reimburse you only for a reduced amount that they deem reasonable. Most folks just pay the difference and never realize they've been cheated. The lawsuit filed by the AG claimed the health insurance companies were deliberately using Ingenix to provide faulty data that set the U&C too low, defrauding millions of consumers from reimbursement for legitimate medical charges. Of course, this increased profits for the insurance companies, and shifted those costs to consumers. Importantly, the AG's settlement does nothing to help folks who were cheated out of insurance reimbursements to which they were entitled.

Most of the major health insurance companies use data from Ingenix to set the U&C rates (including Aetna (NYSE: AET), CIGNA (NYSE: CI), and WellPoint/Empire BlueCross BlueShield (NYSE: WLP)), so even if you don't have insurance through United Healthcare, you may have been scammed. MianoLaw is actively investigating these claims, and lawsuits have already been filed, so if you believe you may have been cheated out of legitimate reimbursements for medical services or procedures and want to discuss your situation with a lawyer, contact me for a free consultation.

If you want to read the press release about the settlement, you can find it here. If you want more information about the way the out-of-network system favors insurance companies, read this.


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