Senate report criticizes plans' use of Ingenix database
■ The findings are similar to what New York's attorney general found in his investigation, which resulted in insurers promising to create a new system.
By Emily Berry — Posted July 13, 2009
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An investigation by the U.S. Senate Committee on Commerce, Science and Transportation has found that the same controversial system for setting "usual, customary and reasonable" pay that was criticized in New York also underpaid patients across the rest of the country.
The report released June 24 details the way insurers for the last decade have used Ingenix's information to set out-of-network pay rates.
A lengthy investigation by New York Attorney General Andrew Cuomo and a series of lawsuits against health plans already had outlined the problems with the industry's use of a database owned and operated by UnitedHealth Group subsidiary Ingenix. The Senate report reiteratedwhat the New York attorney general and the American Medical Association have said before -- that the use of the Ingenix database resulted in underpayments to patients and physicians everywhere in the United States. Committee Chair Jay Rockefeller (D, W.Va.) condemned insurers' use of the Ingenix data.
The report also gave ammunition to critics of the health insurance industry at a time when health plans are trying to have a major role in crafting health system reform. It found that plans using the data also were contributing to it, allowing insurers to feed charges into the database that were skewed downward.
More than 2 million federal employees and military service members were enrolled in plans that used the Ingenix database to set out-of-network pay, potentially reducing reimbursements for out-of-network care.
"This is outrageous at any time, but especially as families all throughout our country are doing everything they can to make ends meet in this economy -- this is despicable," Rockefeller said in a written statement. He called the insurers' actions "unacceptable" and pledged to put a stop to it.
But it remains to be seen how the senator plans to do that, or whether any action would come separately or as part of comprehensive health system reform.
Ingenix responded to the Senate committee report with a statement that said in part: "We continue to stand by the integrity of the databases and our people who worked on them. We also recognize that improving the health care system and empowering consumers to make better decisions requires greater transparency, which is why we are transferring these important health care pricing information resources to a not-for-profit entity that will oversee their maintenance going forward."
That transfer is required under United's deal with Cuomo's office.
The New York attorney general declared his own investigation complete on June 18, when his office reached an agreement with Health Net requiring the company to stop using Ingenix data and contribute $1.6 million toward establishing the new database.
United, WellPoint, Aetna, Cigna, GHI/HIP, Capital District Physicians' Health Plan, Independent Health, Excellus, MVP Health Care, HealthNow and Guardian Life Insurance Co. also have settled with Cuomo's office, pledging to stop using the Ingenix data as soon as a new source is available. Together, the companies have pledged nearly $100 million to establish the new, third-party database. None admitted any wrongdoing.
Separately, the Litigation Center of the American Medical Association and State Medical Societies, as well as individual physicians and many others in organized medicine, have sued United, Aetna, Cigna and WellPoint. A $350 million settlement of the United lawsuit is pending court approval. All of the companies have denied wrongdoing.
Many insurers operating outside New York still are theoretically free to use the Ingenix database, but Ingenix has promised to do away with it. Aetna, Cigna and WellPoint agreed to stop using the database anywhere and to instead use the new data set that has yet to be created.
United is the only company that has agreed to compensate patients or physicians for underpayments. That was part of the settlement of the class-action lawsuit brought by the AMA and others in organized medicine.