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Paul Kiesel
Paul Kiesel
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Cuomo Announces Historic Nationwide Health Insurance Reform, Will Create Fair Rates for Consumers Nationwide

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Attorney General Andrew M. Cuomo has reached an agreement with UnitedHealth Group Inc., the nation’s second largest health insurer, to reform the nationwide health care reimbursement system, after an industry-wide investigation proved there was a massive scheme to defraud consumers by manipulating reimbursement rates, according to Mr. Cuomo’s press release.

The scheme was meant to defraud consumers by "systematically underpaying" patients by hundreds of millions of dollars over the last decade. To do this, UnitedHealth used Ingenix, Inc., a wholly-owned subsidiary of United, which happens to also be the nation’s largest provider of health care billing information, to reimburse patients less than the designated "reasonable and customary" costs of medical services received by doctors outside of the insurer’s designated network of physicians.

Cuomo conducted a probe, announced last February, that showed UnitedHealth’s Ingenix unit operates a "defective and manipulative" database that most health insurers use to set reimbursement rates for out-of-network medical expenses.

Countless UnitedHealth customers, in the past, have been getting grossly shortchanged in reimbursement rates, as the New York Times points out in a similar article published today, if the insurer "understates" the prevailing local fees.

"The patient might receive a doctor’s bill for $100, for example, and expect the insurer to pay at least $70. But if the insurance database says that doctor bill should have been only $72, based on local rates, the patient might get back less than $55," (New York Times, 1/13/09).

Cuomo’s deal with United calls for the creation of a new independent database, to be run by a university that is still to be selected. Cuomo hopes that the new system will be operational in about six months.

However, until the system is overhauled in six months, patients who have been "shortchanged" by the current health care billing/reimbursement system should choose to and are able to legally seek the correct economic remedy, if they were not properly reimbursed.