Medical DevicesInsurers Underpaid 'Billions' In Health Claims
The Senate Commerce Committee has found that a flawed payment database produced by a UnitedHealth subsidiary and distributed to other major insurance companies has led insurers to underpay millions of out-of-network claims, forcing patients to make up the difference of health care providers" fees, the Wall Street Journal reports. Aetna, Cigna, WellPoint, and other large insurers used the data to calculate their "reasonable and customary" charges. They also provided UnitedHealth"s subsidiary, Ingenix, with historic data about their payments, which became the foundation of ongoing versions of the flawed payment models.
"A committee aide said those companies sometimes would "scrub" the data sent to Ingenix - throwing out outlying high costs. Ingenix then would use questionable statistical models to come to its own rate estimates," the Journal reports.
"An Ingenix spokeswoman said the company stands by the integrity of its databases. The two databases in question by the committee represent less than 2% of Ingenix"s overall business. Ingenix also said it doesn"t set actual rates for health procedures."
Sen. Jay Rockefeller, D-W.Va., chairman of the committee, also sits on the Senate Finance Committee which is crafting a health reform proposal. "He hopes to insert into the health-care bill language creating some type of independent evaluator that can certify that health claims are evaluated properly" (Johnson, 6/25).
The exact amount of charges deflected to patients remains unknown, but the Associated Press/New York Times reports the number is in the billions, and that two-thirds of the nation"s health insurance industry relied on the flawed payment models. "UnitedHealth has admitted no wrongdoing in its handling of Ingenix, though it agreed to close the database and help pay for a new one operated by a nonprofit group" (6/24).
"The report was part of a multi-pronged assault on the credibility of private insurers by [Rockefeller]," the Washington Post reports. Wendell Potter, a former public relations executive at Cigna, testified "that the industry"s charm offensive, which is the most visible part of duplicitous and well-financed PR and lobbying campaigns, may well shape reform in a way that benefits Wall Street far more than average Americans" (Hilzenrath, 6/25).
"Insurers make promises they have no intention of keeping, they flout regulations designed to protect consumers, and they make it nearly impossible to understand - or even to obtain - information we need," Potter said according to the Hartford Courant. Now a paid consultant to the Center for Media and Democracy, Potter said wasn"t testifying because he had a grudge against Cigna, but he had a "growing feeling in recent years "that the health insurance industry was taking the country in the wrong direction and was directly contributing to the problem of the uninsured and under-insured in the country"" (Levick, 6/25).
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