Once again it is clear that lack of oversight, meaningful regulation and a level playing field between providers and insurers has resulted in the now all too common finding that insurers are exploiting their position to enrich themselves at the expense of providers and patients.  Limited pay to providers in the long run, is highly detrimental to patients as it discourages young, talented individuals from pursuing careers in  medicine, demoralizes those actively serving the public and encourages the most senior and experienced providers to look to early retirement.   REAL HEALTH REFORM MUST BEGIN WITH MEANINGFUL HEALTH INSURANCE REFORM ! . . .  obi jo

Chicago – The American Medical Association (AMA), along with the Medical Society of the State of New York and the Missouri State Medical Association, claims victory with the settlement agreement reached today in the lawsuit against United Health Group. The $350 million settlement marks the largest monetary settlement of a class action lawsuit against a single health insurer in the U.S.

read press release @ http://www.ama-assn.org/ama/pub/category/20374.html

ATTORNEY GENERAL CUOMO ANNOUNCES HISTORIC NATIONWIDE HEALTH INSURANCE REFORM; ENDS PRACTICE OF MANIPULATING RATES TO OVERCHARGE PATIENTS BY HUNDREDS OF MILLIONS OF DOLLARS

Industry-Wide Reform of Reimbursement System Will End Conflicts of Interest and Create Fair Rates for Consumers Nationwide

NEW YORK, NY – Attorney General Andrew M. Cuomo today announced historic reform of the nationwide health care reimbursement system that will end conflicts of interest and generate fair reimbursement rates for working families nationwide.  Cuomo has reached an agreement with UnitedHealth Group Inc. (NYSE: UNH) (“United”), the nation’s second largest health insurer, after conducting an industry-wide investigation into a scheme to defraud consumers by manipulating reimbursement rates. 

read full story @http://www.oag.state.ny.us/media_center/2009/jan/jan13a_09.html

AMA v. United HealthCare  (S.D.N.Y.)

Issue:  The issue in this class action lawsuit, filed on March 15, 2000, is whether  United HealthCare (UHC) has been systematically understating their calculation of “usual, customary, and reasonable” charges when paying physicians or reimbursing patients for out-of-network medical services.

AMA interest: The AMA supports fair policies and practices regarding payment for physician services.

Case summary

Most reimbursement health insurance policies provide that out of network insurance benefits are to be based on whichever of the following amounts is lowest: (i) the physician’s actual charge; (ii) the physician’s usual charge; or (iii) the “reasonable and customary charge” for the services. The “reasonable and customary charge” is defined as “the usual charge of other doctors or other providers of similar training or experience in the same or similar geographic area for the same or similar service or supply.” This payment scheme is commonly called “usual, customary and reasonable” or UCR. The insurance company determines the reasonable and customary portion of the UCR charge, supposedly based on information available to it but not to the general public.

This suit alleges that UHC’s subsidiary, Ingenix Corp., has developed a database to determine UCR and frequently uses unreliable or insufficient data to make that determination. The plaintiffs assert that the reasonable and customary charges for certain procedures are substantially higher than the insurance companies allow.

The AMA, the Medical Society of the State of New York, the Missouri State Medical Association, individual physicians and subscribers/beneficiaries are named plaintiffs. Several unions of New York State employees have also joined the case as additional plaintiffs. The suit alleges that the plaintiffs are representatives of a large class of physicians, subscribers, and beneficiaries.

The plaintiffs filed a Fourth Amended Complaint on July 11, 2007 and UHC then moved to dismiss most of its counts.  On August 22, 2008, the court granted the motion in part and denied it in part.  As the case now stands, the physician plaintiffs have a claim for equitable relief but not for monetary damages.  The medical societies, who are not a part of the plaintiff class and have never sought monetary damages, retain their claim for equitable relief under an antitrust count.

On Feb. 13, 2008, the New York Attorney General announced that he had commenced a broad investigation into the use by insurers of defective databases when determining “usual, customary and reasonable” payments made to out of network healthcare providers. The Attorney General also announced his intention to bring suit against UHC related to defects in its Ingenix database. The Attorney General’s investigation is ongoing and may result in investigations by regulators in other states.g