The use of flawed databases operated by Ingenix Inc. to determine out-of-network health insurance reimbursement rates was widespread across the nation, according to a new report of the Senate Commerce, Science and Transportation Committee.
Not only did Ingenix scrub data it received from insurers to remove high charges in order to lower "usual and customary" rates on which reimbursement was determined, but the insurers also scrubbed high charges from their data before submitting it to Ingenix, according to the report.
"The results of these questionable statistical methods were estimates of 'usual and customary' charges that consistently skewed reimbursement rates downwards--in a direction that allowed insurers to reduce their claims payments," according to the Senate committee report. "The New York Attorney General concluded that the 'prevailing rates' Ingenix generated for doctor visits in New York were as much as 30% lower than the actual market rates for these services. In other words, insurance companies were paying only 70 cents on each dollar they owned their customers under the terms of their policies."
In recent months, several health insurers have signed agreements with New York Attorney General Andrew Cuomo to stop using the Ingenix databases. They also agreed, along with Ingenix, to contribute to building a new independent database for determining out-of-network reimbursement rates.
Several of the payers, including Ingenix corporate parent UnitedHealth Group, have acknowledged conflicts of interest in the Ingenix databases. Still, UnitedHealth Group CEO Steve Hemsley in March testimony before the Senate committee, defended the integrity of the data. "We want to make clear that we stand behind the integrity of the Ingenix data," he said in written testimony. "In addition, we stand by the way in which our insurance business, UnitedHealthcare, used the data to make reimbursement decisions. Our recent agreement with the New York Attorney General did not relate to the manipulation of data or other similar misconduct."
Joseph Goedert is news editor at Health Data Management.