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UnitedHealth's Ingenix Buys Medical Bills Auditor
Ingenix Inc., UnitedHealth Group's beleaguered IT consulting arm, today purchased Franklin, TN-based medical bills auditor AIM Healthcare Services Inc., and its Netwerkes and Ingram & Associates affiliate, the companies said in a joint announcement.
"AIM is the premier company for improving payment accuracy between healthcare payers and providers," Andy Slavitt, CEO of Eden Prairie, MN-based Ingenix, said in a media release. "Everyone–including most importantly, the patient-consumer–wins. Together, Ingenix and AIM will focus on making administrative and payment processes simple, standard and intelligent for the entire health care system."
The terms of the all cash sale were not disclosed. However, the subscription Web site Nashvillepost.com, citing unnamed sources, placed the value of the deal at about $430 million.
In January, as part of a settlement with the New York Attorney General's Office in a class-action lawsuit alleging conflict of interest and too-low reimbursements, UHG agreed to close Ingenix's database, which prosecutors said at that time was the largest provider of healthcare billing information in the nation. UHG also agreed to pay $50 million to a "qualified nonprofit organization" to establish an independent data base "to help determine fair out-of-network reimbursement rates for consumers throughout the United States," New York Attorney General Andrew Cuomo said at the time.
After a year-long investigation, Cuomo's office had determined that many of the nation's large health insurers unfairly saddle consumers with too much of the cost of out-of-network healthcare, and relied on Ingenix's database to determine their "usual and customary" rates. Cuomo's investigation focused on allegations that—for more than 10 years—Ingenix's database intentionally skewed "usual and customary" rates downward through faulty data collection, poor pooling procedures, and the lack of audits. Ingenix and UHG admitted to no wrongdoing in the settlement.
On Monday, there was no mention of the class-action settlement. Instead, Ingenix and AIM officials said the new company will offer a single source for payment accuracy for health plans and hospitals that will more easily identify and reconcile payment inaccuracies, and will no longer need to engage with multiple parties to achieve payment integrity.
In announcing the purchase, the two companies cited a recent study by The Lewin Group which determined that claims inefficiencies cost the U.S. healthcare system more than $150 billion per year.
John Commins is an editor with HealthLeaders Media. He can be reached at jcommins@healthleadersmedia.com.
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Karin Olson (6/5/2009 at 1:56 PM)
The lead sentence of this story refers to Ingenix as "UnitedHealth Group's beleaguered IT consulting arm." Ingenix is neither beleaguered nor simply UHG's IT consulting arm. Ingenix is a leading health information, technology, research and consulting firm that serves over 250,000 clients, including over 1,500 health plans, over 3,500 hospitals and health systems, 200,000 physicians, over 100 leading employers, 75 leading pharmaceutical companies, federal government agencies and every single state in the US. We have over 10,000 employees in over 40 countries. Our annual revenue is $1.8 billion, and our compound annual growth rate has been over 20% for the last five years. Ingenix has come to be known as a pioneer in health IT, for having the largest health-industry focused consulting business (with nearly 1500 consultants,) for offering premier measurement tools for evidence-based medicine, as a leading global pharmaceutical research organization specializing in clinical trials, drug safety and comparative effectiveness, and, as you reference in your article, as a leader in streamlining administrative transactions, reducing cost and friction from the health care system. With respect to your comments about the agreement between UnitedHealth Group and the New York Attorney General, it is worth noting that the PHCS and MDR databases referenced in the agreement represent well under two percent of Ingenix?s overall business. As you have likely heard us say before, Ingenix stands behind the integrity of these databases, and we are pleased that the agreement reached with the Attorney General will enable this real-market billed charge data, used by thousands of customers -- insurance plans and physicians alike -- to remain available to the marketplace at large.
John Morrow (6/2/2009 at 10:24 AM)
Now here is an irony. The same folks who were licensing data that turned valid claims into unpaid out of network claims are now claiming that they are buying into the solution for auditing claims and going to fix the $150B of inaccurate claims? Now I have seen it all. Is anyone listening in the AG offices across America? How long do you suppose AIM knew that Ingenix had been wrong for a decade? I guess if you can't beat them, join them.