New York Attorney General Andrew Cuomo has announced the creation of a new not-for-profit company to develop an independent database to determine out-of-network health insurance reimbursement rates across the nation.
The new company, FAIR Health Inc., will develop the database with five New York universities--Syracuse University, SUNY at Buffalo, Cornell University, University of Rochester and SUNY Upstate Medical University.
Creation of the new database results from a wide-ranging investigation by Cuomo. He charged that two databases that currently set reimbursement rates, operated by Ingenix Inc., intentionally skewed downward the "usual and customary" rates on which reimbursement was determined. According to Cuomo, the "fraudulent and conflict-of-interest ridden reimbursement system" has affected millions of consumers and cost them hundreds of millions of dollars in unexpected and unjust medical costs.
Cuomo during 2009 secured agreements from 10 national and regional insurers serving New York to stop using the Ingenix databases and contribute funds totaling nearly $100 million to build an independent database.
The use of flawed databases operated by Ingenix to determine out-of-network health insurance reimbursement rates was widespread across the nation, according to a June 2009 report of the Senate Commerce, Science and Transportation Committee.
In settlements with Cuomo, several of the insurers, including UnitedHealth Group, parent company of Eden Prairie, Minn.-based Ingenix, acknowledged conflicts of interest in the Ingenix databases. Still, UnitedHealth Group CEO Steve Hemsley in March testimony before the Senate committee defended the integrity of the data. Ingenix, in a statement on Oct. 27, stood by the integrity of the databases. The company pledged "a smooth and efficient transition for our clients when the new database product becomes available."
FAIR Health and the universities also will build a Web site enabling consumers to find out in advance how much they are likely to be reimbursed for out-of-network services in their area. The new pricing database also will support academic research.
More information is available at oag.state.ny.us/media_center/2009/oct/oct27a_09.html.
--Joseph Goedert
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