An Insurance Company Being Held Accountable Or Are They?
About a month ago, Attorney General of New York Andrew Cuomo announced that UnitedHealthCare(UHC) subsidiary Ingenix "scheme to defraud consumers" by understating their usual reasonable and customary(URC) physician fee schedule database. Their database was utilize by the entire insurance industry to determine the reimbursement rate for out-of-network medical professionals.The databased determined the amount of money that would be reimburse to the patient. Cuomo's staff stated UnitedHealthCare and Ingenix underpaid the consumer hundreds of millions of dollars over the last ten years.
What this all means is that the database was designed to have a patient receive around 28% less than they should have received from paying an out of network medical professional. An example, say the medical professional's fee schedule for an office visit is $100, the patient make a payment of $100, the claim is sent to the insurance company as a paid claim, the patient can be responsible to pay a co-insurance between 20% - 30% of the usual reasonable and customer(URC) charges, this is the insurance companies usual reasonable and customer(URC) charge, not the medical professional's fee. The insurance company's recognizes say only $70, the patient will be reimburse between $49 - $56 for the visit. What happened with UHC's database was that their usual reasonable and customer(URC) charge was 28% below the cost of medical care.
It's great someone is investigating the practices of an insurance company! How did this come about? A professor from Columbia University issued a complaint to Attorney General's office concerning her medical bills. The college professor was diagnosis with ovarian cancer in 2006. Her primary physician recommend Memorial Sloan Kettering for her treatment. The professor went out of network with Sloan Kettering and possibly all the specialists which left the professor with a debt between $70,000 - $80,000.
A question everybody should also be asking,why are the medical professionals choosing to go out of network with UHC. There lies the big problem! Great you may have insurance but now more and more medical professionals are choosing to go out of network. This is an area that needs to be re-examine.
The interesting part is that UnitedHealthCare did not acknowledge any wrong doing on their part and stands behind the quality of their reimbursement database. Plus two statements that are disrupting in the sense nobody takes responsibility for their actions. First Micthell E. Zamoff, "While questions have been raised about the data itself, this agreement does not address those questions". What Mr. Zamoff is about concerns the agreement UHC reach with the Attorney General's office; UHC will pay $50 million to finance the development of a new database which will be based upon the cost of medical care in a specific region. Mr. Cuomo wants a major university to be responsible for the research and development of the new database.
The other statement which I find to be ridiculous is as follows; Karen Ignani - President/CEO of America's Health Insurance Plans "praised UHC for its major leadership effort in dealing with database issue". She also express that for the first time customers will know what doctors are charging for their services before they have an office visit. Well, majority of medical office do inform their patients of the charge for an out of network office visit or procedure. The problem is simple, the doctor or health care professional's office staff does not know the fee the insurance company will reimburse for the visit or procedure. Yes, lets make it look like the health care professional is the problem,not the insurance company. When I deal with an insurance company, you almost feel like you are dealing with CIA.
As you can surmise, no criminal charges were brought against UHC nor was UHC required to pay restitution to the consumer. Instead the government believes the consumer will address these issues in possible class action lawsuit around the country.
As for the agreement, remember, the insurance companies do not have to follow the new database. An insurance company can decide their own fee schedule and yes the health care professional also has their own fee schedule. Both parties can be greedy, probably around 10% of medical professional can be un-reasonable. We need to level the playing field for all groups.One thing to know is that the ball park belongs to the insurance companies and the consumer/medical professional play in the ball park but do not make the rules. I do not believe one universal payor will be the answer. This is an area I will address in another article.
One last thing to note the agreement has little financial affect on UHC bottom line. They are a $80 billion dollar company, also their subsidiary Ingenix generates another $1.5 billion in revenue, so the agreement did not hurt UHC.
I do believe in capitalism and a company has a right to make money. There is a fine balance we must hold onto and not tip the scales. Well, we have tip the scales and now we have to reinvent ourselves.
The only question I have for our Attorney General, why were you so easy on UHC, is there something we do not know.
