UnitedHealth Group, Ingenix To Testify At Senate Hearing About Out-of-Network Rates

Main Category: Health Insurance / Medical Insurance
Also Included In: Primary Care / General Practice
Article Date: 31 Mar 2009 - 6:00 PDT

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Senate Commerce, Science and Transportation Committee Chair Jay Rockefeller (D-W.Va.) on Tuesday will hold a hearing that follows lawsuits and an investigation by New York state Attorney General Andrew Cuomo (D) alleging that UnitedHealth Group and subsidiary Ingenix manipulated out-of-network rate data resulting in patients paying more for those services, the AP/USA Today reports.

More than 70% of workers receiving health care through their employers are enrolled in plans that permit out-of-network care, according to the Kaiser Family Foundation. Usually, those plans pay a percentage of what they determine is the "usual, customary and reasonable" cost for an out-of-network procedure or physician visitation (Werner, AP/USA Today, 3/28).

The Ingenix database is intended to calculate market rates for out-of-network care. However, Ingenix had been accepting claims information from insurers, which it uses to identify average out-of-network rates, without verifying or questioning the data, according to lawmakers. The low payment rates calculated by Ingenix led to patients being charged for differences of as much as 28% between real market rates for payments and those generated by the database. Cuomo has conducted investigations and settled resulting lawsuits against 11 insurers operating in New York that had been using Ingenix (Kaiser Daily Health Policy Report, 3/27).

Rockefeller and other lawmakers said more accountability and transparency are needed in how insurance companies determine out-of-network rates. In addition, they said patients need to understand how payments are calculated and what those payments are before they receive billing in order to avoid confusion. Rockefeller said he does not know how insurers calculate their rates, but added, "They deliberately cut the numbers so the consumer has to pay more of the cost. It's scamming. It's fraud."

Robert Zirkelbach, spokesperson for America's Health Insurance Plans, said physicians' out-of-network rates are the cause of the high bills. He said, "Consumers would be shocked if they knew the exorbitant rates that some nonparticipating providers charge" (AP/USA Today, 3/28).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2009 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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