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Nation's health insurers make headlines in two states
NY attorney general subpoenas insurers in ‘reimbursement scheme’
New York Attorney General Andrew M. Cuomo has launched an investigation of some of the nation’s largest health insurance companies for manipulating medical reimbursement rates.
Cuomo issued 16 subpoenas Feb. 13 to companies including Empire BlueCross BlueShield, a division of Indianapolis-based WellPoint, Aetna and Cigna.
Central to the attorney general’s plan is a lawsuit against Ingenix, a major provider of health care billing information for insurers, as well as UnitedHealth Group, the Ingenix parent company, and three UnitedHealth subsidiaries.
Cuomo described Ingenix as “a conduit for rigged data to the largest insurers in the country.” The Ingenix database determined reasonable and customary rates for United and many other health insurance companies.
However, the investigation showed reasonable and customary rates produced by Ingenix were remarkably lower than the actual cost of typical medical expenses.
In six-month’s of scrutiny, Cuomo’s office found that by distorting the reasonable and customary rate, United insurers kept reimbursements “artificially low” and forced patients to absorb a higher share of the costs.
“When insurers like United create convoluted and dishonest systems for determining the rate of reimbursement, real people get stuck with excessive bills and are less likely to seek the care they need,” said Cuomo.
The subpoenas request documents showing how the insurer computes reasonable and customary rates, copies of member complaints, and appeals and communications with members, and between Ingenix and the insurer.
AMA and ISMA reaction
“The investigation launched by New York Attorney General Andrew Cuomo calls into question the validity of a system that health insurers have used for years to reimburse physicians and their enrolled members,” said AMA President-Elect Nancy Nielsen, M.D. “Patients have a right to expect fair and accurate payment for services promised by health insurers.”
ISMA leadership will follow the case, even though Indiana is not involved in the investigation.
“We certainly think all insurance companies have been using outdated and inappropriate usual and customary fees for years,” said ISMA President Jon Marhenke, M.D. “We’re not surprised by this lawsuit, and we’re actually pleased the New York attorney general is investigating. It will likely have an impact here in Indiana over time.”
Read the NY attorney general’s official statement>>
California insurer halts letters asking doctors to report patient information
An outburst of criticism – from physicians, patients and even the California governor – preceded an end to letters from Blue Cross of California to physicians, asking them to report medical conditions of patients that could be used to cancel insurance coverage.
The insurer, a subsidiary of Indianapolis-based WellPoint, said Feb. 12 the letters were no longer necessary and created a “misimpression.”
Thousands of letters were sent to physicians, along with completed insurance applications, asking doctors to report any discrepancies between their patients’ medical conditions and information in the applications. WellPoint officials said the effort was an attempt to contain costs.
California physicians criticized the company for asking doctors to violate the sacred trust of patients. The California Medical Association had urged state regulators to order Blue Cross to stop the letters.
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