Must Be an Election Year, II

[Welcome Insurance Forums readers!]

[UPDATE & BUMP: See below]

"New York Attorney General Andrew Cuomo plans on Wednesday to announce the launch of an industrywide investigation into health-care insurers, his office said."

Wow, an industrywide search. Pretty impressive (if a bit overwhelming). And what's Mr Cuomo's beef with insurers?

"Attorney General Andrew M. Cuomo today announced that he is conducting an industry-wide investigation into a scheme by health insurers to defraud consumers by manipulating reimbursement rates. At the center of the scheme is Ingenix, Inc., the nation’s largest provider of healthcare billing information, which serves as a conduit for rigged data to the largest insurers in the country."

Oooh, "rigged data!" Nothing loaded about that phraseology, is there? The issue is how folks are covered for non-emergency out-of-network care. Traditionally, reimbursement rates for these services are paid as a percentage of "usual and customary" (UCR). And who decides what's UCR? Well, apparently Ingenix does.

Which raises an important, if impudent, question: so what?

Someone has to set these rates, else what's the benchmark? And imagine the hue and cry if the carriers themselves did so. Kind of a "darned if you do..." scenario. According to the company's website, over 1,500 insurance companies and health plans utilize these services (that number's important: it represents the vast majority of carriers). Interestingly, over 200,000 health care providers also use this service.

Wonder when Mr C's going to investigate them?

And since he apprently doesn't think that little effort's going to take some doing, the Empire State's AG plans to sue one of our favorite targets, United HealthCare, for allegedly engaging in "deceptive practices."

And what practices are these, you may wonder?

In order to rein in out-of-network costs, UHC chose to "keep their reimbursements artificially low and force patients to absorb a higher share of the costs."

A higher share of the costs for choosing to go out of network? Heaven forfend!

For its part, UHC (in an email I received this morning) says they use such tools "to set their own reimbursement schedules, establish fees for non-network care, negotiate provider service contracts and review claims for their members and consumers."

Seems inocuous enough to me. But then, I actually favor consumers being more proactive, and taking more personal responsibility for their health care and how it's financed.

(Hat tip: Industry Radar)

UPDATE: Bob sent me this link to an LA Times article which reports "City Atty. Rocky Delgadillo has assembled a team of investigators and prosecutors to probe industry practices such as canceling patients' coverage after they get sick." This is of a piece with what Bill has written about recent efforts in this area.