[UPDATED X 1] While Attorney General Andrew Cuomo of New York goes after UnitedHealth Group Inc., North Dakota Attorney General Wayne Stenehjem watches from the cheap seats.
UnitedHealth Group Inc. will close much-criticized databases health insurers use to set payment rates and help launch a new one to settle a fraud investigation, which could help millions of patients pay less for "out-of-network" care.
The Minnetonka, Minn.-based health insurer has agreed to pay $50 million to establish the new database, which will be run by a nonprofit organization like a university, according to a deal ironed out with the New York attorney general's office.
The new database will replace two run by UnitedHealth's Ingenix Inc. subsidiary that are used to determine "usual and customary" payment rates for care patients seek outside their insurance network.
Insurers often promise to cover as much as 80 percent of these rates for claims from providers outside their network, according to the attorney general's office.
But an investigation found that insurers using the Ingenix databases underpaid anywhere from 10 percent to 28 percent for certain claims in New York state. Consumers often saw the difference in their bills.
"We believe that Ingenix is essentially the black box for consumers," Attorney General Andrew Cuomo said Tuesday during a New York City press conference.
He said the databases were riddled with conflicts of interest. He noted that many health plans across the country use Ingenix data to determine usual and customary rates.
Associated Press (emphasis added)
And Cuomo isn't going to stop with UnitedHealth Group Inc.
"I'm putting all other insurance companies on notice today," he said, "… there's a strong case they were perpetrating consumer fraud."
So "there's a strong case" that every insurance company that used Ingenix was perpetrating consumer fraud?!?
And apparently this "Ingenix" company's (alleged) conduct was so bad that part of the deal brokered by the A.G. of New York is that "Ingenix will close ."
Well, thankfully we don't have to worry about Cuomo coming to North Dakota because I'm sure our very own Insurance Commissioner and our very own Attorney General have protected us from consumer fraud by insurance companies that use Ingenix. We can be confident no North Dakota insurance companies uses Ingenix.
What is that you are saying?!?
I give you.... an excerpt from North Dakota's Workforce Safety and Insurance's Fee Schedule.
1. The WSI Medical Fee Schedule will be a true fee schedule - WSI will pay the lesser of the billed charges or the fee schedule amount.
2. The WSI physician fee schedule amounts will apply to all providers, both in state and out of state.
3. WSI will incorporate Medicare’s definitions and use of “facility” and “non-facility” sites of service. Service provided in a “non-facility” setting will be paid using Medicare’s non-facility RVUs. Services provided in a “facility” setting will be paid
using Medicare’s facility RVUs.
4. When Medicare publishes annual updates to the RVU weights, WSI will incorporate any transitional weight amounts.
5. There will be no adjustments to the RVU weights for Geographic Practice Cost Indices (GPCI), for the work RVU floor or for other RVU adjustments except for transitional periods applied to base RVU amounts.
6. For the HCPCS codes with no published RVUs, payment determinations will be made based on the Ingenix regional Usual & Customary (UCR) charge data-nine and north of Minnesota state highway twenty-eight or in a city through which one of those highways runs, providers located in South Dakota cities within ten miles of the North Dakota border; and providers located in Montana cities within forty miles of the North Dakota border.
WSI Fee Schedule Guidelines And Medical Services Rules 2008 (emphasis added) (this is just one reference to "Ingenix" in WSI's fee schedule; there are others.)
And Blue Cross Blue Shield is listed as a company Cuomo is going after. I haven't seen or read anything about whether BCBS of ND is in on this, but they might be. How many of you think North Dakota's Attorney General is looking into the use of Ingenix at BCBS, WSI or any other company in North Dakota?!?
Raise your hands.
And stick with me for one more minute. We're going to extend this possible "consumer fraud" one more step. I'll do it with a hypothetical question.
Hypothetical Question Set-up: Let's say, for discussions sake, that Governor Hoeven finds a spine in a closet in the capitol building and tries it on. (Ha!) While he's trying it on he appoints someone to study WSI's use of Ingenix. Let's say he determines that WSI has engaged in consumer fraud by using Ingenix's numbers. Let's say in September 2009, Hoeven's WSI fraud commission determines WSI's consumer fraud has caused its rates to be 10% too high (or low; you pick). He orders WSI to stop engaging in consumer fraud and adjust its rates.
Hypothetical Question #1: If these things end up to be true, will WSI be able to adjust its rates so that it stops engaging in consumer fraud?
Answer: If North Dakota's House Republicans get their way and a bill passes (here's a link to the bill, HB1036) limiting the Governor's authority to order adjustments to WSI's rates, he will not be able to stop WSI from committing consumer fraud. (Click for for the story on that.)
Hypothetical Question #2: Will legislators who vote for a bill limiting the Governor's authority to stop WSI from committing consumer fraud be co-conspirators in consumer fraud?
Answer: Yes. Or at very least they'd be guilty of being complicit.
The problem with the Republican bill to limit the governor's authority over WSI is that it neglects to deal with the possibility someone might be cooking the numbers for WSI. Well, with this Ingenix situation, it seems pretty clear someone is. And the legislature's solution to the problem is to tie the Governor's hands so he could -- if he had a spine -- fix it.
[UPDATE #1: Aetna is also ponying up $20 million because of its involvement in this scheme. UnitedHealth is also paying another $350 million to settle a class action suit in which it was alleged that the insurers passed cost on to patients "by submitting data that made their payment obligations look lower than they were." . (Click here.)
I haven't seen anything about this in the local media yet.
Is this too complicated a story for our local media to understand?]