Insurance Fraud Scheme Investigated in N.Y.: Head of State Task Force Alleges 'Ingenix Is Nothing More Than a Conduit for Rigged Information.'

Article excerpt

Following a 6-month initial investigation, New York Attorney General Andrew Cuomo announced plans to file suit against UnitedHealth Group and four of its subsidiaries for allegedly systematically underpaying consumers for their out-of-network medical expenses.

The attorney general claimed that UnitedHealth Group used faulty data from one of its subsidiaries, the billing information company Ingenix Inc., which resulted in the underestimation of "usual, customary, and reasonable" rates for a range of out-of-network medical expenses and then provided unreasonably low reimbursement to consumers.

The investigation is ongoing and the attorney general's office has issued subpoenas to 16 other health insurance companies who use the Ingenix database. The subpoenas will seek documents that show how the companies calculate reasonable and customary rates, as well as copies of member complaints and appeals, and communications with Ingenix.

The investigation has national implications since five of the nation's largest health insurance companies rely on data from Ingenix, according to the attorney general.

UnitedHealth Group has denied that there are problems with the reference data used by Ingenix, which is "rigorously developed, geographically specific, comprehensive and organized using a transparent methodology," according to a company statement. The insurer says it is in discussions with attorney general's office and plans to cooperate fully.

Ingenix owns a database of billing information that many health insurers use to determine how much to reimburse consumers who go out of network for their care. But the attorney general's preliminary investigation found that the Ingenix data are provided by insurers that have a vested interest in keeping the rates low and that there is no auditing of the data that come in, Linda Lacewell, head of the attorney general's Health Care Industry Task Force, said at a press conference held to announce the industry-wide investigation.

The database also doesn't take into account whether a service was provided by a physician or a non-physician provider, a factor that would affect the price, Ms. …