UnitedHealth Settlements Will Improve Cost Transparency
Two settlements involving UnitedHealthGroup this week will require the nation's largest health insurer to shell out $400 million, cease two databases run by its subsidiary Ingenix, and help fund a new independent database that will collect price information.
As part of the settlements, UnitedHealth Group will pay $50 million to develop and own a new independent database that will replace Ingenix's two databases, Prevailing Health Charges System and Medical Data Research. The money will also fund a new healthcare consumer Web site to provide market prices for patients. In addition, Hartford, CT-based health insurer Aetna has agreed to pay $20 million to help fund the new database.
Critics of Ingenix, which most insurers use to determine "prevailing" and "usual, customary and reasonable charges" for out-of-network physician services, have complained that a health insurer-owned company should not oversee the databases. With the agreement, a yet-to-be determined university will house the price information, which will also allow doctors and patients access to the data, in addition to health insurers.
"The Ingenix database has corrupted the system for paying out-of-network medical bills, resulting in patients and physicians being cheated by health insurers. A lack of transparency, accuracy, and integrity in the payment system has allowed insurers to place profits ahead of their promises to patients," says Nancy H. Nielsen, MD, president of the American Medical Association, which filed the lawsuit with two state medical societies in 2000 that challenged the validity of the Ingenix's databases. Nielsen asked health insurers to stop using Ingenix databases and create a new independent database immediately.
Nielsen says the new independent database will create a more transparent process because physicians will have access to the information that Ingenix deemed proprietary.
"What will happen is now patients will know. It will be transparent what the fee is and what the insurer has agreed to pay. It won't be this secret, rigged scheme to keep what the insurance company pays low," she says.
In the $350,000 settlement, which is being called the largest class action lawsuit settlement against a single U.S. health insurer, UnitedHealth Group agreed to resolve the 2000 lawsuit.
UnitedHealth Group officials, who did not acknowledge any wrongdoing in the settlements and stand behind the quality of information Ingenix's database, believe that the two settlements resolve the issues raised by the AMA and New York Attorney General Andrew M. Cuomo's office concerning the company's two physician charge databases.
Robert Laszewski, president of Health Policy and Strategy Associates, LLC, a policy and marketplace consulting firm in Alexandria, VA, however, says the winner in the two settlements is neither physicians nor consumers, but the health insurance industry. "When the day is done, I don't think it changes much for the consumer or for the physician, but it gets the insurance industry off the hook in terms of people being able to be critical of them or sue them for conflict of interest," says Laszewski.
Les Masterson is senior editor of Health Plan Insider. He can be reached at firstname.lastname@example.org. Elyas Bakhtiari is a managing editor with HealthLeaders Media. He can be reached at email@example.com.
- Two-Midnight Rule Must be Fixed or Replaced, Say Providers
- Don't Underestimate Emotional Intelligence
- The Secret to Physician Engagement? It's Not Better Pay
- Care Coordination Tough to Define, Measure
- Yale New Haven Health Partners with Tenet Healthcare in CT
- Physicians Take SGR Repeal Message to Washington
- Size Matters in Antibiotic Overuse
- CDC Warns of Antibiotic Overuse in Hospitals
- 4 Reasons PCMH Principles Aren't Going Away
- SCOTUS Review of NC Board Case 'A Very Big Deal' to Providers