The New York Times /AP (2/18, B4) reports that the Cigna Corporation has agreed to "stop using a faulty database to calculate reimbursement rates for patients who see doctors outside of their insurance networks" as part of a settlement with New York Attorney General Andrew Cuomo. In doing so, "Cigna joins several other major insurers that have reached" similar "agreements with Mr. Cuomo in the nationwide push to reform how healthcare reimbursement rates are set."
The Wall Street Journal (2/18, Fuhrmans) adds that the agreements resolve allegations "from a year-long probe by New York Attorney General Andrew Cuomo into whether the industry systematically underpays for out-of-network care" through the use of "a database, run by UnitedHealth's unit Ingenix." The investigation revealed that "providers that don't belong to" insurers' networks "are typically reimbursed for only a portion of 'usual and customary' charges," which "were found to be set by insurers below what the doctor or hospital was actually billing, leaving patients to pay the difference." As part of the settlement, Cigna will "contribute $10 million to a new, independent database that it and other insurers plan to use to calculate" out-of-network payments.
Cuomo also announced that "he intends to sue Excellus Blue Cross Blue Shield for manipulating reimbursements for out-of-network services, Bloomberg News (2/18, Freifeld) notes. And, in a separate lawsuit, the American Medical Association "sued Aetna Health Inc. and Cigna Corp. in New Jersey federal court, alleging the insurers used 'a corrupt system'...to underpay physicians and patients." MSNBC (2/18) and Modern Healthcare (2/18, Blesch) also covered the story.
WellPoint agrees to $10 million settlement with New York over out-of-network reimbursement rates. Bloomberg News (2/18, Freifeld) reports that WellPoint Inc., the second-largest US insurer, "agreed to pay $10 million to settle an investigation by New York into how the insurer reimburses clients for out-of-network services, according to a person familiar with the probe." New York Attorney General Andrew Cuomo "has been investigating how the health insurance industry handles out-of-network claims for about a year." Cuomo "says insurers industrywide have used a 'rigged' database operated by UnitedHealth's Ingenix subsidiary to set artificially low reimbursement rates." The settlement by WellPoint "may be announced as early as today," Bloomberg adds. "Cuomo has scheduled an 11 a.m. event at North Shore University Hospital in Manhasset, New York." The settlement makes WellPoint "the fourth major company known to come to terms with...Cuomo over how it determines 'reasonable and customary charges' for out-of-network doctor visits."
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