Doctors and dollars

Typically, reimbursement rates for out-of-network physicians are based on what is generally accepted as the “reasonable and customary” rates charged by doctors in a a common geographic area. But who determines what is reasonable and customary? The attorney general’s staff is focusing on a company known as Ingenix, which collects data that are used by health insurance companies to determine what is charged in a particular region and how much a company will reimburse out-of-network physicians, based on prevailing rates in that area.

Ingenix, it turns out, is owned by UnitedHealth Group, the giant health insurer. The obvious question, then,is whether Ingenix’s data reflect the true cost of physician services in a particular area, and are strictly informational, as the company insists, or whether they serve the insurance companies by keeping reimbursement rates low, as the attorney general suspects.

Mr. Cuomo has also subpoenaed 16 other insurers and says the investigation could involve hundreds of millions of dollars in fraud. Meanwhile, the American Medical Association is suing Ingenix, on the grounds that cost data have been deliberately manipulated to keep reimbursement rates low by, among other things, combining figures for high- and low-cost areas.

More like this please.