Jan 14, 2009 7:33 am US/Eastern
UnitedHealth Pays NYS Millions In Fraud Case
Attorney General Cuomo: Insurance Giant Underpaid Patients By As Much As 28 Percent Over Last Decade
NEW YORK (CBS) ―
They admit they defrauded customers for over a decade. On Tuesday one of the nation's leading health insurance companies agreed to a multi-million dollar settlement with New York State.
The industry as a whole said it manipulated rates to overcharge patients.
Health insurance reimbursements are at issue here. The state attorney general said insurance companies have cheated patients out of hundreds of millions of dollars over the last 10 years.
"That there's a very strong case that they were involved in consumer fraud," Attorney General Andrew Cuomo said.
Cuomo said UnitedHealth Group, operator of Ingenix, the nation's largest database of billing information for out-of-network reimbursements for the industry, set the stage for insurers to underpay patients by as much as 28 percent. Typically, out-of-network reimbursements are 80 percent of usual and customary rates.
Mary Jerome, 64, is an extreme example because she filed claims "in-network," but over the last two-and-a half years had to pay close to $50,000 out-of-pocket.
"I have advanced stage ovarian cancer," Jerome said.
For example, a chemotherapy treatment for which the hospital billed insurance $3,000 was reimbursed only $1,500 dollars, leaving $1,500 for the patient to pay.
"I felt victimized at the time and extremely angry," Jerome said.
Mitchell Zamoff is an attorney for UnitedHealth Group.
"We regret the conflict of interests. We're inherent in the Ingenix database product," Zamoff said.
The insurance giant has agreed to pay $50 million to establish a new, independent database to determine fair, out-of-network reimbursements. And nationwide, insurance companies are likely to cough up what former patients are owed.
"I believe consumers are entitled to hundreds of millions in reimbursements," Cuomo said.
The new system for reimbursements, that is promised to be more fair, could be established in six months.
And that new system will include a Web site where consumers can find out in advance how much they can be reimbursed for common out-of-network medical services.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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