Surgery News - May 2008 - (Page 7)

M AY 2 0 0 8 • SURGERY NEWS OPINION EDITORIAL 7 Customary and Unreasonable patient, havYourselected ing you as an outof-network provider, has BY LAZAR J. GREENFIELD, been told by M.D., FACS her insurer, UnitedHealthcare, that your consult charge of $200 far exceeds the “usual, customary, and reasonable” (UCR) charge in your area. The UCR was listed at $77, and at the contractual 80% rate of reimbursement, she received $62 and owes you the remaining $138. When you asked UnitedHealthcare for the source of its UCR information, you found yourself referred to Ingenix Inc. That company has purchased and merged two databases in order to determine UCR. The first of these (Medicode) was derived from relative values assigned to each procedure multiplied by a conversion factor. These artificial prices were originally designed for cost containment. The second of these databases (PHCS) was developed in 1973 by Health Insurance of America in order to provide limited geographic information about charges. It eliminates the highest ones, includes the lower charges of network providers, and fails to account for the qualifications of the provider (U.S. District Court, Southern District of New York: American Medical Association et al. v. United Healthcare Corp. et al., Fourth Amended Complaint). Ingenix boasts of having more than 1,500 insurance companies and health plans as clients. What it doesn’t disclose is its incentive to keep the UCR as low as possible for its owner, which happens to be the parent of UnitedHealthcare, UnitedHealth Group. In fact, a 6-month investigation by the attorney general’s office in New York found that Ingenix “operates a defective and manipulated database that most major health insurance companies use to set reimbursement rates for out-of-network medical expenses” (Notice of Proposed Litigation, Feb. 13, 2008). Among the 16 other insurance companies charged are Aetna, CIGNA, and Empire Blue Cross/Blue Shield of New York. This type of fraud was challenged by the American Medical Association in March 2000 when it filed a class-action lawsuit on behalf of physicians, subscribers, and beneficiaries naming UnitedHealthcare and Metropolitan Life Insurance. The suit states that UnitedHealthcare must disclose the internal data it uses to pay claims under its policies, and that it must pay physicians and patients the true UCR for services billed. Since then, several rulings have been made, most significantly on Dec. 29, 2006, when the court granted the AMA’s request to add charges based on federal racketeering, antitrust, and various state laws. As expected, lawyers are papering the walls with briefs, so the case is proceeding at a glacial pace. Meanwhile, in California, UnitedHealth Group’s PacifiCare is facing fines of $1.33 billion for 133,000 alleged violations of state laws and regulations regarding payments for medical care (Los Angeles Times, Jan. 29, 2008). Evidence that those insurance companies reward analysts who cancel policies as soon as a medical claim is made prompted the Los Angeles city attorney to take the unusual step of posting a notice on a Web site to solicit public information about insurance cancellations and denial of treatment. As prosecutors and politicians rush to capitalize on these revelations, lawyers will continue to collect large fees, and insurers will continue to profit at the expense of patients and physicians. In many states, the problem will be less visible since settlements with insurance companies have been negotiated. Let’s see, with 70% of the insured paying higher premiums for the ability to use out-of-network providers and getting scammed, 47 million people uninsured, and total health care expenses now at 16% of the gross domestic product and rising, maybe, just maybe our health care system needs serious attention. DR. GREENFIELD is editor in chief of SURGERY NEWS. SIMPLE, SAFE& SOUND Exceptional gram-negative efficacy unprecedented safety The most common adverse reactions were local reactions (up to 2.4%) and systemic reactions such as diarrhea, nausea/vomiting, and rash, which occurred at less than 1.4%. AZACTAM is contraindicated in patients with known hypersensitivity to aztreonam or any other component in the formulation. ® Please see brief summary of prescribing information on adjacent page. © 2005, Elan Pharmaceuticals, Inc.

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Surgery News - May 2008 Contents New Lung Approach Speeds Extubation Innovative GI Procedures May Improve Diabetes Quality Programs Differ on Risk Data Crystal Ball Medical Modeling Ventricular Valve Taking Stock

Surgery News - May 2008

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