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AMA Sues Aetna, CIGNA Over Out-of-Network Care

Feb 23, 2009 | Parker Waichman LLP Aetna and CIGNA have been named in a lawsuit filed by the American Medical Association (AMA) over health insurance reimbursement payments.  According to the AMA, the lawsuit charges that Aetna and CIGNA used a flawed database to pay physicians artificially low rates for out-of-network care.

The database in question is operated by Ingenix Corp., a wholly-owned subsidiary of UnitedHealth Group.  The database used "usual and customary" rates  to calculate reimbursements for out-of-network care.  The AMA lawsuit seeks damages for physicians from each company commensurate with what doctors would have been paid if the out-of-network pay rates had been calculated accurately. Damages are also being sought for patients who overpaid, the AMA said.

The lawsuit alleges that both Aetna and Cigna intentionally shortchanged reimbursements.  It also charges that Aetna, the most active contributor of charge data that Ingenix used in its database, eliminated some higher charges before submitting its information to Ingenix.   This skewed the charges lower in the first of several steps to artificially drive down usual, customary and reasonable rates.  As a result, the reimbursements calculated were lower than what they should have been, the lawsuit said.

The Ingenix database has already been the subject of an investigation by the New York State Attorney General.  UnitedHealth, Aetna, Cigna and several other insurers have agreed to stop using the Ingenix database and contribute millions of dollars to set up a new database that will be run by an independent, nonprofit corporation. But while  UnitedHealth has agreed to compensate doctors and patients for its low-ball reimbursements, neither Aetna nor Cigna have agreed to do so.

AMA President Nancy H. Nielsen, MD, PhD, an internist from Buffalo, N.Y., said that in addition to abandoning the Ingenix database, Aetna and Cigna must pay physicians and patients what they should have in the first place.

"We are willing to turn the page, but they need to make whole the physicians and patients who should have been paid fairly."

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