Capital Region insurers affected by probe

New York Attorney General Andrew Cuomo’s investigation into a medical billing firm’s alleged manipul

New York Attorney General Andrew Cuomo’s investigation into a medical billing firm’s alleged manipulation of reimbursement rates is touching almost all of the Capital Region’s major health insurers.

Cuomo announced Wednesday that he is investigating possibly fraudulent practices at the nation’s largest provider of health care billing information, Ingenix.

Most area health insurers said they have relied on information provided by that Eden Prairie, Minn., firm. While many insurers said they expected Ingenix’s information to be accurate, they stopped short of declaring it so.

The attorney general is preparing to sue Ingenix, its Minneapolis parent, UnitedHealth Group, and other subsidiaries after a six-month investigation. Cuomo alleges that Ingenix uses a “defective and manipulative” database that sets artifically low reimbursement rates for out-of-network health care expenses.

The alleged reimbursement rate scheme forced patients to pay higher premiums.

United stood by its medical billing information.

“The reference data is rigorously developed, geographically specific, comprehensive and organized using a transparent methodology that is very common in the health care industry,” United said in a statement.

As part of the investigation, Cuomo sent 16 subpoenas to health insurers nationwide. Along with subpoenaing industry giants such as Aetna in Hartford, Conn., and Cigna in Bloomfield, Conn., Cuomo sent subpoenas to MVP Health Care in Schenectady, Capital District Physicians’ Health Plan in Albany, Empire BlueCross BlueShield in New York and BlueShield of Northeastern New York in Latham.

Fidelis Care did not receive a subpoena, though it is not clear whether the Rego Park insurer is a Ingenix customer.


“CDPHP is simply a client of Ingenix, like most health plans in New York state and across the country. As a physician-guided and member satisfaction-focused plan, we expect Ingenix’s data to be accurate,” said CDPHP spokeswoman Ellen Boyle.

Empire President and Chief Executive Officer Mark Wager said his company is cooperating with the attorney general in determining whether any of the information it received from Ingenix was “inaccurate or inappropriately determined.

“If that is found to be the case, Empire would consider any and all remedies available to protect the interests of our members, their families, our group customers and providers in the New York marketplace,” Wager said.

BlueShield of Northeastern New York spokeswoman Karen Merkel-Liberatore said the Latham insurer has used Ingenix’s services, but she was not sure whether they are currently being utilized. Cuomo’s subpoenas requested documents describing how insurers set “reasonable and customary” rates, copies of member complaints and corporate communications with Ingenix.

The attorney general’s investigation also found that two United subsidiaries, which used Ingenix’s database to set rates, allegedly forced patients to shoulder a higher share of medical costs.

In one example cited by Cuomo, a United subsidiary allegedly claimed that a doctor visit cost $77, when such care traditionally costs $200. The insurer would then pay its 80 percent contractual reimbursement rate for $77, or $62. That left the patient footing the remaining $138.

The New York Health Plan Association criticized Cuomo’s investigation, which came on the heels of his crackdown on insurers’ practice of using cost to grade physician care.

The Albany group, which represents 30 health plans, said the investigation “reflects an inadequate understanding of the processes used to set reimbursement rates for out-of-network medical expenses.” The problem could be addressed by requiring doctors to post their costs for patients.

“It’s a two-way street here. Doctors have not provided much information to consumers,” said Health Plan Association President Leslie Moran.

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