New York Attorney General, Andrew Cuomo, announced that his office is conducting an industry-wide investigation into fraudulent activity by some of the nation’s largest insurers – including Aetna, Empire Blue Cross Blue Shield, CIGNA and UnitedHealth Group.

Insurers accused of rigging data

In a recent press release, Cuomo accused insurers of participating in a scheme to “defraud consumers by manipulating reimbursement rates”. Cuomo says that Ingenix, Inc., the nation’s largest provider of healthcare billing information – and also a subsidiary of UnitedHealth Group – has served as a “conduit for rigged data to the largest insurers in the country.” His investigation found that “by distorting the ‘reasonable and customary’ rate, the United insurers [subsidiaries of the UnitedHealth Group] were able to keep their reimbursements artificially low and force patients to absorb a higher share of the costs.” He has issued 16 subpoenas and said that he intends to file a lawsuit against Ingenix and possibly against three other subsidiaries of UnitedHealth Group, including United HealthCare Insurance Company of New York, Inc., United Healthcare of New York, Inc. and United Healthcare Services, Inc.

Investigation

His investigation, which has been ongoing for six months, found that Ingenix operated a “defective and manipulated database that most major health insurance companies use to set reimbursement rates for out-of-network medical expenses” and that two additional subsidiaries of UnitedHealth Group “dramatically under-reimbursed their members for out-of-network medical expenses by using data provided by Ingenix.” Cuomo provided the following example of the fraudulent scheme:

United insurers knew most simple doctor visits cost $200, but claimed to their members the typical rate was only $77. The insurers then applied the contractual reimbursement rate of 80%, covering only $62 for a $200 bill, and leaving the patient to cover the $138 balance.

The United insurers and Ingenix are owned by the same parent corporation, UnitedHealth Group. When members complained their medical costs were unfairly high, the United insurers hid their connection to Ingenix by claiming the rate was the product of ‘independent research.’

Enough is enough

Cuomo’s actions have been applauded by organizations such as the American Medical Association, the Medical Society of New York and Families USA. Cuomo, joined by others such as California Insurance Commissioner Steven Poizner, implied that enough is enough when he said:

Getting insurance companies to keep their promises and cover medical costs can be hard enough as it is. But 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.

Insurance companies who do not treat their policyholders with good faith and deal with them fairly act in bad faith – and consumers can fight back. If your insurance company has denied your valid claim, contact an attorney whose practice focuses in this area of law. To contact a qualified attorney, please click here.