This would be the week of bad press for health insurers. Seen in the Los Angeles Times:
The nation’s largest health insurers—including UnitedHealth Group, Health Net, Aetna and Cigna—have been cheating patients by rigging the rates companies pay physicians and forcing consumers to pay higher medical bills, New York law enforcement authorities said today.[...]
The investigation began six months ago and found that Ingenix operates an allegedly defective and manipulated database that most major health insurance companies use to set reimbursement rates for out-of-network medical expenses, New York state officials said.
New York officials said 70% of people with health insurance are on plans that require them to pay a higher fee for the right to use physicians who are not under contract with their carrier. Such out-of-network arrangements often require the patient to pay 80% of “reasonable and customary” rates for physician services.
The investigation found that poor and distorted data from Ingenix allowed insurers to keep their reimbursements down by lowballing local market rates for various types of physician services, investigators said.
For example, the investigators said, insurers knew that most physicians charged $200 for a routine visit. But the insurers, using Ingenix data, claimed to their members that the typical rate was $77. Applying the 80% reimbursement rate, they covered only $62, leaving the patient to pay $132 out of pocket.
You know, if that energy could be spent on deciphering the economics of the medical care system’s billing practices, rather than focusing on the utilization of one particular industry database, we’d be a few steps closer to having useful information in addressing the questions of health care costs and medical cost inflation in the country.