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NY AG: UnitedHealth overcharges for out-of-plan services
http://www.usatoday.com/money/industries/insurance/2008-02-13-cuomo-healthinsurers_N.htm


By Julie Appleby, USA TODAY
Several of the nation's largest health insurers used data rigged so that patients would overpay for visits to doctors outside the insurers' own networks, New York Attorney General Andrew Cuomo alleged Wednesday.
Cuomo, who last year took on insurers over the methods they used to rank doctors on quality and cost, said he intends to file a lawsuit against UnitedHealth Group and its subsidiary, Ingenix, which supplied the data.

Because that data is used by other insurers, Cuomo said he also is launching an industrywide investigation. His office has subpoenaed 16 other insurers, including Aetna, CIGNA and Humana.

"This involved fraud in the hundreds of millions of dollars affecting thousands and thousands of families," Cuomo said.

The allegations come as the majority of insured patients in the country belong to a type of insurance that — unlike HMOS — allows patients to go outside their insurers' networks to seek care from unaffiliated doctors.

Cuomo alleges that United and Ingenix manipulated data so that insurers would pay less to those non-network doctors for such care — and patients would pay more.

United says it is cooperating with the attorney general's investigation and defends its Ingenix data. The data "is rigorously developed, geographically specific, comprehensive" and uses methods common in the health care industry, United says in a statement.

But Cuomo alleges that a six-month investigation by his staff uncovered problems with the data, including the use of outdated information and deliberate manipulations.

"This is a big deal," says Kevin Lembo, who heads a Connecticut health agency that advocates for consumers. "I can't recall a case that has dug this deeply into the reimbursement methods of managed-care companies."

At the center of Cuomo's allegations is a situation many patients find themselves in: They go to an out-of-network doctor and get a bill.

Generally, insurance policies require patients to pay 20% to 30% of that bill, and the insurer pays the rest. But insurers usually pay only their share of whatever they determine to be doctors' "usual and customary" fees.

Many insurers, including United, use Ingenix data to gauge how much doctors in an area typically charge. Ingenix calculates those charges by using claims data submitted by insurers.

Cuomo alleges that Ingenix manipulated the data to knock out high-cost claims, thus lowering the average doctor fee to the insurers' advantage.

For example, he said, the fair market rate in an area might be $200 for a doctor's office visit. By knocking out the higher claims, Ingenix would show that doctors in the area charged perhaps only $77. The insurer would then pay its share of the bill — say, 80% — of $77, or about $62. The patient, however, would pay $138, the balance between what the insurer paid and the $200.

Karen Ignagni, CEO of America's Health Insurance Plans, the industry's lobbying group, released a statement questioning why the visits cost $200. "As medical costs continue to soar, this is the discussion that public policy leaders need to have," she said.

When members complained about such low reimbursement, "United refused to explain," said a letter sent Wednesday from the attorney general's office to United.

(end of article)
Notice that Assurant Health is not mentioned in that article. Wouldn't you like to protect your family dependably?

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