TMA has joined a pair of class-action lawsuits against CIGNA Corp. and Aetna Health, Inc. for using a flawed system to underpay physicians for out-of-network medical services and force patients to pay an excessive portion of the costs. The lawsuits, filed last week in a New Jersey federal court, contend that CIGNA and Aetna used the system for more than a decade.
Aetna and CIGNA relied on skewed data from the UnitedHealth Group subsidiary Ingenix to set reimbursement rates for out-of-network care, the lawsuits charge. Evidence from a recent investigation launched by New York Attorney General Andrew Cuomo found that the Ingenix data are intentionally manipulated to allow health plans to scam physicians and patients by shortchanging reimbursements on medical bills.
"It's time for Aetna and CIGNA to stop this unethical business practice that shocks our patients with unexpectedly high bills for health care they thought they'd already paid for," said TMA President Josie R. Williams, MD. "It's time for them to stop cheating physicians and patients just to pad their own profits."
American Medical Association President Nancy Nielsen, MD, said AMA, TMA, and the other partners in the lawsuits "seek to reform the payment systems used by Aetna and CIGNA by ending their dependence on the Ingenix database. The lawsuits also seek relief for physicians who were seriously harmed by Aetna and CIGNA through the insurers' long-term use of the flawed Ingenix database."
In addition to the lawsuit, TMA is asking the 2009 Texas Legislature to take several steps that will help patients who so choose to use all the options in the health insurance they buy. TMA wants the legislature to give the Texas Department of Insurance (TDI) authority to hold health plans accountable for developing adequate networks. TMA also supports measures that grant TDI authority to require health plans to disclose internal methodologies or data sources they use to determine how much they pay for out-of network services. Last year, TMA also recommended to the Texas Sunset Commission that it suggest TDI have authority to look into data-mining companies such as Ingenix.
"When health plans don't bother to put together a comprehensive network of physicians, they force patients to go out of network for the care they need," Dr. Williams said. "And, when the insurance companies use their own secret formulas, they dump higher costs onto patients who thought they were exercising their options under their insurance policy to see the doctor of their choice."
The Litigation Center of the American Medical Association and State Medical Societies supports the lawsuits. in partnership with the Connecticut State Medical Society, the Medical Society of New Jersey, the Medical Society of the State of New York, the North Carolina Medical Society, and TMA.
In January, UnitedHealthcare agreed to shut down the Ingenix system it uses to determine "usual, customary, and reasonable" (UCR) charges as part of a settlement with Mr. Cuomo. The company also agreed to pay to develop a new system to determine fair out-of-network reimbursement rates.
Also in January, Aetna said it would "stop using the Ingenix databases for the purpose of determining 'prevailing' or 'usual, customary, and reasonable' charges when members receive covered care from providers outside a health plan's network." It said it would instead help Mr. Cuomo "create a new independent database for this purpose and will use the new database when it is ready for use." Aetna added that it is "contributing $20 million to a nonprofit organization to help create the new database and to help educate members about reimbursement rates."
In its settlement with Mr. Cuomo, United said it will close the Ingenix database. The database uses the insurers' billing information to calculate UCR rates for individual claims by assessing how much the same, or similar, medical services would typically cost, generally taking into account the type of service and geographical location. Under this system, insurers control reimbursement rates that are supposed to fairly reflect the market.
Mr. Cuomo said he was looking into whether the Ingenix database intentionally skewed UCR charges downward through faulty data collection, poor pooling procedures, and the lack of audits. In announcing the settlement, he said he found that having a health insurer determine the UCR rate creates an incentive for the insurer to manipulate the rate downward. Creating a new database, independently maintained by a nonprofit organization, is designed to remove this conflict of interest, he said.
Action, Feb. 16, 2009
Last Published: 2/16/2009
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