Ingenix database replacement: Seeking a FAIR solution on out-of-network pay rates

After a nearly decade-long fight in the name of fairness, those seeking a more equitable way to set payment for physicians who see patients out of network are starting to see some light at the end of the long tunnel.

Earlier this year, many insurers agreed to stop using a flawed Ingenix database to determine usual, customary and reasonable rates for out-of-network physicians as soon as an independent new database was online. With the Oct. 27 announcement that work on the nonprofit Fair and Independent Research -- FAIR -- database had begun, doctors are a big step closer to seeing a vastly improved system. Nonprofit group FAIR Health could be ready to launch the database as early as fall 2010.

The major problem with the Ingenix database was that insurers -- including UnitedHealth Group, which owns Ingenix -- were feeding it bad information. By lowballing usual, customary and reasonable rates and passing along the information masked as independent, proprietary research, insurers were able to shortchange physicians for years with no recourse. Patients were punished along with them simply for choosing to continue seeing their doctors in an out-of-network setting.

The vision of the FAIR database is one in which this sleight of hand no longer can occur. Independent experts, not insurers, will determine what the fair rate for out-of-network services should be. A patient and his or her physician will be able to go online to see how much a particular service will cost -- and how much the insurer is willing to pay -- before the patient even sets foot inside the doctor's office.

That way, there will be no surprises after the fact for anyone. Physicians will not be wrongly accused of trying to overcharge patients, and insurers will be forced to stay honest when it comes to paying what they owe. Rather than face frustration from a "black box" filled with suspect data, physicians and their patients will be able to tap an open source based on transparency, accuracy and integrity.

Many details of the new database must be worked out as it is constructed, but the early signs are promising. Physicians will have an important voice throughout the process; Nancy H. Nielsen, MD, PhD, immediate past president of the American Medical Association, will be the first physician to fill the medical representative position on the FAIR Health board of trustees.

It's unfortunate that it took years of litigation and tireless advocacy from organized medicine before the insurers did the right thing on the out-of-network payment issue. And the fight is not over when it comes to compensating physicians and their patients for all the years of artificially low payments.

Although a $350 million settlement of an AMA lawsuit against United awaits approval from a judge, additional legal actions against other insurers who generated and took unfair advantage of the flawed data are still pending. None of the firms have admitted any wrongdoing.

Physicians want to do the best thing for all of their patients, including those who choose to keep seeing them outside of the insurer's network. But doctors and patients cannot make those choices in good faith if they don't have all the information they are owed. And physicians deserve to be compensated at the correct level. The FAIR vision is a new way of doing business in which everyone is treated fairly and with respect.