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).