Attorney General Andrew Cuomo revealed yesterday a deal with UnitedHealth Group that will help end a costly guessing game millions of Americans play when paying fees for out-of-network services.
The agreement with the nation's second largest health insurer creates a fairer way to calculate reimbursement rates and requires the company to pay $50 million for the effort, Cuomo said.
"We will reform this entire health care system and change the fundamental way over 100 million Americans are being reimbursed, and we're doing it at a time when they desperately need help," Cuomo said. "In this economy, there's all sorts of pressures. The last thing they can afford is to be ripped off in health care."
In February, Cuomo began an industrywide probe into health care reimbursements, finding that some companies had shortchanged payments to customers for at least a decade. His office set its sights on the country's largest insurers, including Aetna, Cigna and Blue Cross Blue Shield, as well as United, based in Minnetonka, Minn. Representatives of Aetna, Cigna and Blue Cross Blue Shield did not return calls yesterday.
The reimbursements affected customers who opted for out-of-network insurance, which has higher premiums but allows customers to seek care from any doctor they choose. On Long Island, an estimated 28,000 residents have such a policy with United, Cuomo's office said. Oxford Health Plans is a subsidiary of United.
Consumers receive reimbursements based on what insurers call "usual and customary" rates for out-of-network expenses based on where they live. During the yearlong probe, Cuomo learned those rates were established by the insurance industry based on billing information provided to them.
And a majority of insurers use the same company, Ingenix Inc., the nation's largest provider of health care billing information. United owns Ingenix.
"We believe this is an obvious conflict of interest," Cuomo said. "You have these insurance companies going to Ingenix to determine ... the rate and Ingenix is getting the input from those very same companies."
As part of the deal, Ingenix will close and the $50 million will help create a nonprofit, independent billing agency, officials said.
"We regret that conflicts of interest were inherent in these Ingenix database products," United spokesman Mitchell Zamoff said. "We think that this not-for-profit entity will finally and decisively resolve any questions about the independence of the database."
In Manhattan, patients typically were reimbursed 10 to 20 percent less than they should have been, Cuomo's office said. Statewide, patients were underpaid by as much as 28 percent. Figures for Long Island were not available.
Nationwide, about 110 million people have out-of-network policies. Cancer patient Mary Jerome, 64, of Yonkers, is among them. Jerome, who was diagnosed with ovarian cancer in July 2006, said she was "completely overwhelmed" when her out-of-network policy didn't adequately cover the cost of operations and chemotherapy.
"I felt like I had to battle twice," she said. "I had to battle cancer and I'm still battling it. ... I then felt I had to battle my insurance company."
Statewide, patients were underpaid by as much as 28% To see more of Newsday, or to subscribe to the newspaper, go to http://www.newsday.com Copyright (c) 2009, Newsday, Melville, N.Y. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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