The American Medical Association (AMA) has issued a press release with a statement from Nancy Nielsen, MD, AMA President. Dr. Nielsen offered comments on New York State Attorney General Andrew Cuomo's announcement of his efforts in health insurance reform. According to the AG's office, Cuomo has reached an agreement with UnitedHealth Group Inc. ("United"), the nation's second largest health insurer, "after conducting an industry-wide investigation into a scheme to defraud consumers by manipulating reimbursement rates."

The investigation involves Ingenix, Inc., a wholly-owned subsidiary of United. According to the statement, the investigation "concerned allegations that the Ingenix database intentionally skewed "usual and customary" rates downward through faulty data collection, poor pooling procedures, and the lack of audits. That means many consumers were forced to pay more than they should have. Under the announced agreement with United, the database of billing information operated by Ingenix will close; further, United will pay $50 million to a qualified nonprofit organization that will "establish a new, independent database to help determine fair out-of-network reimbursement rates for consumers throughout the United States."

AG Cuomo has a new health care report on his website, "The Health Care Reimbursement System is Code Blue," in which the collective authors explain that Ingenix has a conflict of interest in preparing schedules, and that serious reforms are needed including "'usual and customary' or market rates for health care charges should be determined by an independent third party free of conflicts of interest, using a fair, objective, and reliable database," and consumers should have a cost estimate before choosing an out-of-network doctor.
Flawed Data Leads to Wrong Payment Basis

Dr. Nielsen states, "In the wake of groundbreaking agreements arranged by New York Attorney General Andrew Cuomo, the AMA calls upon all health insurers to immediately reject the fatally flawed Ingenix database.

"The Ingenix database has corrupted the system for paying out-of-network medical bills, resulting in patients and physicians being cheated by health insurers. A lack of transparency, accuracy and integrity in the payment system has allowed insurers to place profits ahead of their promises to patients.

"Health insurers who truly recognize the importance of restoring their damaged relationships with patients and physicians should commit to the solution proposed by New York Attorney General Cuomo without delay.

"His proposal would remove the grossly flawed Ingenix database from the control of health insurers and trust its repair and operation to a not-for-profit institution. An independent and transparent database will keep private interests from corrupting the data used to set reimbursement rates for out-of-network care.

"Health insurers should act immediately to create an industry-wide commitment to end their use of the rigged Ingenix database and work to restore fair reimbursements to patients and physicians."

Adapted from a release from the AMA and information from the New York State Attorney General's website.

Read more about it:
From the AMA at http://www.ama-assn.org/ama/pub/category/20376.html
From the NY AG's office:
http://www.oag.state.ny.us/media_center/2009/jan/jan13a_09.html
Link to AG's report: http://www.oag.state.ny.us/bureaus/health_care/HIT2/pdfs/FINALHITIngenixReportJan.13,%202009.pdf

More Industry Headlines