Final health plan reaches settlement over Ingenix database

Health Net agrees to use, and help pay for, a new database.

By Bob Cook — Posted June 29, 2009

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Health Net has become the 12th and final insurer to stop using a controversial database under terms of a settlement with New York Attorney General Andrew Cuomo's office. Meanwhile, the state's governor has created regulations that would make those settlements permanent.

Health Net on June 19 agreed to stop using a database operated by UnitedHealth Group subsidiary Ingenix. Health plans had used the database to set out-of-network rates for physicians. Cuomo said his investigation found that the Ingenix information was rigged to underpay physicians their so-called usual, customary and reasonable rates.

Health Net agreed to contribute $1.6 million for the development of a new, independent database to set out-of-network rates. That brings the total commitment from health plans to $94.6 million. None of the plans has admitted wrongdoing.

The Medical Society for the State of New York said it was happy to see all of the state's insurers sign on to the Cuomo deal and the new database.

The society was among the plaintiffs, including the American Medical Association, in a 2000 class-action lawsuit against United over the Ingenix database. The case was settled earlier this year for $350 million.

The settlements last five years. However, New York Gov. David Paterson and the state's insurance department have made those terms permanent. A new regulation requires health insurers to use an independent source, rather than a health plan-owned company like Ingenix, to establish the usual and customary rates for a physician's service in a certain area. The regulation also requires the plans to disclose the source of their data, and to post the information online so it is accessible to members.

However, the fight isn't over regarding what physicians see as past underpayments because of the use of Ingenix. The AMA and others have sued Aetna, Cigna and WellPoint separately in federal court. The plans deny the allegations that they intentionally underreimbursed physicians.

Also, following testimony from the AMA and others, U.S. Sen. Jay Rockefeller (D, W.Va.) asked the inspector general of the Office of Personnel Management to investigate whether federal employees were overcharged because their plans used the Ingenix database.

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