Insurers under investigation for fraudulent reimbursement rates


New York Attorney General Andrew Cuoma has issued subpoenas to Aetna, Cigna, UnitedHealth, WellPoint, and other insurers in a broadening investigation of possible fraud in setting insurance reimbursements that cost consumers hundreds of millions of dollars. Insurers charge a higher premium to consumers, promising to cover 80% of reasonable and customary rate for out-of-network services. In setting the rates, however, they allegedly used rigged data from Ingenix, Inc. Called an “independent” research firm, Ingenix is actually a wholly owned subsidiary of UnitedHealth Group (Michael Gormley, AP 3/7/08).

“United’s secret black box is the foundation for virtually all insurance payments in New York,” writes Robert Goldberg, D.O., president of the Medical Society of the State of New York. “The lack of external oversight and audit, and Ingenix’s demonstrated indifference to fixing known defects in the database, justifies the Attorney General’s concern” (MSSNY’s News of New York, March 2008).

For an office visit costing $200, United might, for example, claim that the typical rate was only $77. The insurer would reimburse only $62 (80% of $77), leaving the consumer to pay the $138 balance.

“Had it not been for the complaints of non-participating physicians and their patients, this never would have come to light,” writes Lawrence Huntoon, M.D., Ph.D., New York neurologist and editor-in-chief of the Journal of American Physicians and Surgeons. “The conflicts of interest uncovered are astounding.”

The New York Health Plan Association blames the doctors for grossly inflating out-of-network charges (Vanessa Fuhrmans and Theo Francis, Wall Street Journal 2/14/08).

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  1. When Anthem of Kentucky (WELLPOINT), charges routine drawing of blood as SURGERY, making the payer put it on a highly deductable Major Medical and WELLPOINT pays nothing, tells the patient how much he saved on routine medical visits while WELLPOINT again, pays nothing but the patient payes a considerable sum, WELLPOINT and its fellow partners are forcing people to go to the Government for help. Of course, any one who hasn’t had a brain injury is well aware that the Government has NEVER IMPROVED ANY SITUATION, JUST MADE IT MUCH WORSE, SHOULD REALIZE THAT IT WILL BE THE BIG INSURANCE COMPANIES that will participate in the drafting and SHARING in SOCIALIZED MEDICINE.

  2. I believe that all the CEO’s of all the Insurance Co are crooks. They want to take home billions of dollars that rightfully belongs to the providers. I think that our lobby is not very powerful. We all providers should get together and demand that they give us our fair share.

  3. United health has refused to pay me for routine visits of one of their insured for almost a full year AFTER having paid for reasonable and proper treatments for the previous several years for the same problems. They want me to submit unreasonable justification for every detail of each visit amounting to nearly 15 pages of material for each visit. Then their lackies at Ingenix tear everything up and no pay is forthcoming. No wonder their CEO could have gotten an extra 600 million