- UnitedHealth Group Settles with New York A.G. to Shut Down its Health Billing Subsidiary
- December 11, 2009
- Law Firm: King & Spalding LLP - Atlanta Office
New York Attorney General Andrew M. Cuomo announced January 13 that UnitedHealth Group Inc. has agreed to shut down Ingenix, Inc., United’s health billing information subsidiary and the largest U.S. provider of health care billing information. The settlement results from a national investigation by Cuomo’s office into allegations that health insurers using the “defective and manipulated” Ingenix database systematically underpaid providers by relying on faulty methods for determining reasonable and customary fees.
The investigation focused on allegations that the Ingenix database intentionally skewed reimbursement rates downward through faulty data collection, poor pooling procedures, and the lack of audits, leading to underpayments by insurers ranging from 10 percent to 28 percent for various medical services across New York locations. In February 2008, Cuomo announced that he had issued subpoenas to the nation’s largest health insurance companies that use the Ingenix database, including Aetna, CIGNA, and WellPoint/Empire BlueCross BlueShield.
Under the terms of the settlement, according to Cuomo, United is to pay a qualified nonprofit organization (to be selected later) $50 million to replace the Ingenix operations and set up an independent database to help determine insurers’ out-of-network reimbursement rates; the nonprofit group will own and operate the new database, and will be the sole arbiter and decision maker with respect to all data contribution protocols and all other methodologies used in connection with the database; the project will include a Web site to allow consumers to find out in advance how much they may be reimbursed for common out-of-network medical services in their area; and, the nonprofit group will make rate information from the new database available to health insurers and use the database to conduct academic research to help improve the health care system.
Cuomo’s industry-wide investigation is continuing, and Connecticut Attorney General Richard Blumenthal issued a statement commending the settlement and indicating that he also would continue an investigation into the role of the Ingenix database in health insurer reimbursements.