“Usual and Customary” is About to Get Redefined

NY States Attorney General Andrew Cuomo yesterday announced the formation of a new not-for-profit research consortium that, within a year, will develop an independent database to determine just what “reasonable and customary” fees are for medical care patients receive from docs outside their insurer’s network. The database will replace the Ingenix database, which was essentially an arm of United Health.

Insurers often promise to cover as much as 80 percent of those rates for claims from providers outside their network. However, Cuomo’s investigation found that Ingenix had a vested interest in helping set rates low, thus allowing companies to underpay patients for out-of-network services by as much as 28 percent.

Cuomo said the Ingenix database intentionally skewed “usual and customary” rates downward through faulty data collection, poor pooling procedures and the lack of audits.

The new database, to be operated independently by FAIR Health, will remove the conflict of interest and determine fair out-of-network reimbursement rates for consumers throughout the United States, Cuomo said. It also will be an aid to researchers and engine for health care reform, he said.

Cuomo said officials hoped to have the database and consumer Web site operating within a year. (via AP)

It’s amazing what can be accomplished with a little legal muscle, isn’t it? Single-handedly, Cuomo has done more to move health reform forward than the entire Congress has so far.

Just take a look at this timeline to get a sense of the momentum this guy has –

Beginning in January, Attorney General Cuomo secured agreements with every national and regional health insurer operating in New York State to end their use of the Ingenix database and financially commit to the new, independent database:

• January 13, 2009: UnitedHealth Group Inc. agrees to shut down the Ingenix database and contribute $50 million towards the new, independent database.
• January 15, 2009: Aetna agrees to end its relationship with Ingenix and contribute $20 million towards the new, independent database.
• February 2, 2009: Aetna also agrees to reimburse over 73,000 students at over 200 colleges nationwide for underpaying out-of-network claims.
• February 4, 2009: MVP Health Care agrees to end its relationship with Ingenix and contribute $535,000 towards the new, independent database.
• February 4, 2009: Cuomo announces intent to sue Capital District Physicians’ Health Plan for defrauding consumers across New York by manipulating rates.
• February 10, 2009: Independent Health and Health Now, New York Inc. agree to end their relationships with Ingenix and contribute $475,000 and $212,500, respectively, to fund the new database.
• February 17, 2009: CIGNA agrees to end its relationship with Ingenix and contribute $10 million towards the new, independent database.
• February 17, 2009: Cuomo announces intent to sue Excellus Health Plan for defrauding consumers across New York by manipulating rates.
• February 18, 2009: WellPoint, Inc. agrees to end its relationship with Ingenix and contribute $10 million towards the new database.
• March 3, 2009: Guardian Life Insurance Company of America agrees to end its relationship with Ingenix and contribute $500,000 towards the new database.
• March 5, 2009: Excellus Health Plan and Capital District Physician’s Plan agree to end their relationships with Ingenix and contribute $775,000 and $300,000, respectively, toward the new database. The companies also agree to re-process claims over the past six years and reimburse members who were underpaid.
• March 10, 2009: GHI and HIP agree to end their relationships with Ingenix and contribute $1.5 million towards the new database
• June 18, 2009: Health Net agrees to end its relationship with Ingenix and contribute $1.6 million towards the new database.

God only knows what he was threatening them all with…

Go, Andy!