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Senator Wants Federal Probe of Ingenix Reimbursements

Apr 28, 2009 | Parker Waichman Alonso LLP

A key U.S. Senator has called for a federal investigation of  the way the UnitedHealth Group subsidiary, Ingenix, used its database to determine reimbursement rates for  the Federal Employees Health Benefits (FEHB) program.   Recent investigations conducted by the New York Attorney General's office have found that various insurance companies used the Ingenix database to shortchange doctors and patients  on reimbursement rates.

In January, the New York Attorney General announced that it had reached a deal with UnitedHealth in which the company would pay $50 million to set up a new database for determining reimbursement. The database is to be owned and operated by a non-profit organization in order to eliminate insurance company conflicts of interest.

Ten other insurers, including Cigna, Aetna and Wellpoint have also have also reached agreements with the New York Attorney General. In addition to ending their use of the Ingenix database, WellPoint and Cigna agreed to pay $10 million each toward the new database. Aetna also recently agreed to end its relationship with Ingenix and contribute $20 million to the new database.

The settlements followed an investigation which revealed that because of Ingenix, many consumers were forced to pay more than they should have for out-of-network care, with underpayment by insurers ranging from ten to twenty-eight percent for various medical services across the state. The Attorney General’s investigation also found that having a health insurer determine the “usual and customary” rate for a service – a large portion of which the insurer then reimburses – creates an incentive for the insurer to manipulate the rate downward.

In a letter written last month to the Inspector General of the Office of Personnel Management, Sen. Jay Rockefeller (D-W. Va) expressed concerns that the Ingenix database was used to manipulate reimbursement rates for federal workers enrolled in  FEHB.  According to a report in AMNews, Rockefeller wants to know going back 10 years, how many FEHB plans used Ingenix to set rates and how many federal employees were affected.

Rockefeller sent the letter following two rounds of Senate committee hearings in March over Ingenix and out-of-network pay, AMNews said.