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UnitedHealth Group settles reimbursement rate probe
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In a settlement with one of the nation's biggest insurers, New York's attorney general, Andrew Cuomo, has ordered an overhaul of the databases the industry uses to determine how much of a medical bill is paid when a patient uses an out-of-network doctor.
A statement from Cuomo's office said the industry had engaged in "a scheme to defraud consumers" by systematically underpaying the nation's patients by hundreds of millions of dollars over the last decade.
The move, to be announced today, is part of a settlement with Minnetonka-based insurance giant UnitedHealth Group, which operates the industry databases. It results from a yearlong investigation in New York by Cuomo's office that concluded that the data had understated the true market rates of medical care by up to 28 percent.
The settlement will have a nationwide impact because UnitedHealth, the biggest health insurer in New York, operates the databases used by the entire industry, through its Ingenix business unit. The deal calls for creation of a new independent database, to be run by a university yet to be chosen.
Because insurers typically reimburse patients for only 70 to 80 percent of the "reasonable and customary" cost of medical services when they visit doctors outside the insurer's designated network of physicians, the patient can get shortchanged if the insurer understates the prevailing local fees.
The patient might receive a doctor's bill for $100, for example, and expect the insurer to pay at least $70. But if the insurance database says that doctor bill should have been only $72, based on local rates, the patient might get back less than $55.
UnitedHealth did not acknowledge any wrongdoing and said it stood by the quality of information in the database.
Under the agreement, UnitedHealth will pay $50 million to finance the creation of the new database, which will be intended to determine the prevailing costs of medical care in specific regions. Cuomo said he would prefer the university chosen to run the database be one in New York. Meanwhile, UnitedHealth's Ingenix unit is allowed to continue running the operations.
No criminal charges have been sought in the case. UnitedHealth was not required to pay restitution to consumers, although the disputed reimbursements are the subject of class-action lawsuits around the country.
The agreement will have little financial effect on UnitedHealth Group, whose annual revenue is about $80 billion.
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inconsistency is an issue in processing claims in Mn as well
I was covered by UHG last year. The 4 members of my family made a total of 23 visits to an out of network Chiropractor. Each claim was the … read more same, a total of three items marked on the form, with an identical total. UHG initially processed the 23 claims to reimburse 8 different amounts. I called numerous times to complain and to get an explanation as to why there were differences, and was told the claims would be reprocessed. Some of them were, others weren't. The end result was that the claims were processed 12 different ways. I neglected to call them back when the last two that were processed were reimbursed at 100%. The total reimbursement never did come close to reaching the 70% coverage that stated in all the documentation I was sent or found online.
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