Andrew Cuomo, the Attorney General in New York State, just completed an agreement with a major medical insurer, which will create a fairer method to set reimbursement rates for medical treatment that has been obtained out of network.
UnitedHealth Group, which is the nation’s second largest health insurer, has agreed to modify their system of setting reimbursement rates for out of network benefits. As part of the agreement, they have agreed to pay $50 million to set up a new, nonprofit entity to determine what actual “normal and customary rates” for procedures should be set at.
Currently, private insurance companies charge extra premiums for the right of their subscriber to obtain their healthcare out of their network. The insurance company reviews the out of network claims that are submitted to them and only pays the amount they determine is the “normal and customary charge” for the service. I do not know about your experience, but I have never been able to find any doctor who is willing to accept the “the normal and customary charge” as payment in full.
Last February Cuomo started an investigation into the reimbursement question. He found that many companies have shortchanged their subscribers for well over a decade (no surprise here). He investigated the country’s largest insurer carriers including Aetna, Cigna, Blue Cross and UnitedHealth.
His investigation showed that one single company, Ingenix Inc., which was owned by UnitedHealth Care, established these “normal and customary rates” for all the insurance companies. Clearly, this is a major conflict of interest as United, through Ingenix is setting the reimbursement rates themselves. This corrupt system has allowed our insurances companies to bilk us many dollars over a long time period.
United has now agreed to close Ingenix and use their $50,000,000 donation to be used to set up an alternative, nonprofit entity to collect billing data to establish future fair reimbursement rates.
There has been no response from the other insurance companies that are being investigated for this practice. Cuomo estimates that statewide patients have been under paid by as much as 28 percent. Nationwide about 110 million people have insurance policies that include out of network benefits. It is now time for the other states to follow suit and halt this practice.
No longer should we have to fight both our cancer and then go to battle with our insurance carrier.
Joel T Nowak MA, MSW
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