State targets medical insurers
Westchester County Association officials, while pursuing their legislative agenda for health care reform for a third year in Albany, have found an ally in the state attorney general”™s office.
Atty. Gen. Andrew Cuomo recently announced his office”™s investigation of some of the nation”™s largest health insurance companies for allegedly scheming to defraud consumers by setting unreasonably low reimbursement rates for health care services. Among 16 companies subpoenaed to turn over records in the ongoing probe are Aetna Inc., CIGNA Corp., Empire BlueCross BlueShield, Oxford Health Plans L.L.C. and Guardian Life Insurance Co.
Cuomo said the cost-cutting scheme and the state”™s six-month probe centers on Ingenix Inc., the nation”™s largest provider of health care billing information, whose parent company is UnitedHealth Group, based in Minneapolis, Minn. The attorney general has notified Ingenix, its parent company and three other UnitedHealth Group subsidiaries that he intends to file lawsuits against them. Two targeted subsidiaries are New York companies, United HealthCare Insurance Co. of New York and United HealthCare of New York Inc.
Both companies charged members higher premiums for the right to see doctors out of network, or outside the list of preferred providers. Those members, the suit alleges, were “lulled into a false sense of security” that their insurer would pay either the full charge or up to 80 percent of “reasonable and customary” charges based on geographic market rates.
Instead, the attorney general charged, those companies used a “defective and manipulated” database operated by Ingenix to keep reimbursements artificially low and force patients to absorb a far higher share of costs. Cuomo charged United insurers hid their corporate connection to Ingenix by claiming their reasonable and customary rates were the product of “independent research.”
“United”™s ownership of Ingenix coupled with the inherent problems with the data it is using clearly demonstrates a broken reimbursement system designed to rip off patients and steer them toward in-network doctors that cost the insurer less money,” Cuomo said.
The companies served subpoenas also use Ingenix billing services. The subpoenas request documents showing how the companies compute reasonable and customary rates, copies of member complaints and appeals and communications with members and between Ingenix and the insurer on the issue.
UnitedHealth Group officials said they will cooperate with the attorney general”™s office. “UnitedHealth Group recognizes the excellent health care delivered to patients by the physicians of New York and is committed to fair and appropriate payment for physicians, the state”™s other health care providers and consumers,” they said.
United officials said the data provided by Ingenix to health plans are “rigorously developed, geographically specific, comprehensive and organized using a transparent methodology that is very common in the health care industry.” The data are used by health care payers “to independently negotiate their own reimbursement schedules, establish fees for out-of-network care, negotiate provider service contracts and review claims for their members and consumers,” they said.
In White Plains, Westchester County Association (WCA) President William M. Mooney Jr. said the business community was “very pleased” with Cuomo”™s investigation, which “complements our ongoing efforts to level the playing field for hospitals, physicians, patients and employers.”
Formed three years ago, the WCA”™s blue ribbon task force on the health care crisis found that “disproportionately low reimbursement rates are harming physicians, hospitals, consumers and business owners compared to the HMOs”™ excessively high profits in New York State and the growth of reserves that far exceed the required minimum,” he said.
In the last two years, the WCA and Suburban Health Care Alliance, representing hospitals and health care providers in the lower Hudson Valley and on Long Island, have lobbied successfully for market conduct reforms in the health insurance industry that were enacted into law. At Cuomo”™s request, WCA task force members met with his staff in November to discuss additional reforms, Mooney said.
The attorney general”™s action “will help in getting the much-needed additional reforms mandated to stop the abuses that are threatening both our economic vitality and the public”™s access to health care,” he said.
Mooney this month met with Assemblyman Joseph Morrelle, chairman of the Assembly Insurance Committee, to discuss the task force”™s findings regarding the market dominance of health insurers over business and health care providers. The WCA and its suburban allies urged lawmakers to enact legislation that would:
Ӣ Increase regulatory oversight of HMOs by the state Superintendent of Insurance.
Ӣ Establish a statewide Healthcare Reinvestment Fund similar to the banking industryӪs Community Reinvestment Act that would return some of the profits of the insurers to the hospitals to help make capital-intensive investments needed to enhance their technology and infrastructure.
Ӣ Obligate insurers to pay when an authorized service is rendered.
Ӣ Require insurers to issue standardized health insurance identification cards.
Ӣ Provide hospitals and physician groups with limited antitrust immunity to negotiate with health insurers.
Ӣ Prevent health insurers from re-routing physician and hospital payments to patients when they have asked insurers to pay providers directly.
Ӣ Limit financial liability of patients by prohibiting the policy of changing in-network hospital coverage to out-of-network status when a patientӪs physician is not in the network.