Legal News

NY AG on UnitedHealth Database: Garbage In, Garbage Out

By Dan Slater

That’s how Linda Lacewell, the head of Andrew Cuomo’s health-care industry task force, characterized a database that insurer UnitedHealth uses to calculate payments to out-of-network providers. Cuomo said that within five days he plans to sue UnitedHealth as part of a broader investigation into how the health-insurance industry uses a common practice to allegedly saddle consumers with higher bills for out-of-network visits. Here are stories from the WSJ and NYT.

As part of the probe, Cuomo issued subpoenas to 16 health insurers, including Aetna, Cigna and Wellpoint’s Empire Blue Cross Blue Shield unit. UnitedHealth is at the center because it owns a database that much of the rest of the industry uses to determine usual and customary charges. In a news conference, Cuomo added that UnitedHealth’s ownership of the billing-data provider was “a gross conflict of interest.”

Cuomo says his six-month investigation has revealed that rates generated by Ingenix — i.e. the portion of an out-of-network bill that the insurance company will cover — were much lower than they should have been.

UnitedHealth said it is in discussions with Mr. Cuomo’s office and will continue to cooperate fully. Karen Ignagni, the president of America’s Health Insurance Plans, the main health-insurance industry lobby said, “It’s unfortunate that today’s media event . . . . failed to address the appropriateness of charging out-of-network patients $200 for ’simple doctor visits’ lasting ‘15 minutes’ — which equates to a billing rate of at least $800 an hour.”

Full post as published by Law Blog - WSJ.com on February 14, 2008 (boomark / email).