Managed Care - April 2008 - (Page 8) LEGISLATION & REGULATION New York’s UCR Controversy Likely to Spread Nationwide Hard-charging New York Attorney General Andrew Cuomo says reported rates are neither usual nor customary, nor are they reasonable By John Carroll F Consumers have not been fairly reimbursed, says New York Attorney General Andrew Cuomo, who promises an industrywide inquiry. or investigators in the New York attorney general’s office, the evidence seemed clear that UnitedHealth Group was running an insurance scam. They had a succinct example to demonstrate how it worked, too. Their research showed that doctors charged an average of $200 for an uncomplicated, 15minute office visit, but the insurer was basing its 80 percent payment on a UCR office visit rate of $77 (UCR, for usual, customary and reasonable). Plans paid $62; members were getting stuck with the balance, $138. Most insurers agree to pay a percentage of the doctor’s bill or the UCR, whichever is lower. However, Attorney General Andrew Cuomo alleges that the UCR — a cost provided by Ingenix, a UnitedHealth Group subsidiary — was rigged. Ingenix is the only company that calculates UCR rates in the whole nation. “This is an industrywide investigation because we believe this is an industrywide scheme to deceive and defraud consumers,” says Cuomo as he accuses Ingenix — and UnitedHealth Group — of doctoring the numbers. “We believe that Ingenix systematically reduced the amount of money that should have been reimbursed.” Blasts managed care Aside from indicating that he may seek restitution for consumers who paid too much, Cuomo doesn’t outline what he would be looking for by way of a remedy. He does blast the managed care industry for reaping hundreds of millions of dollars over “many, many years” and singles out the corporate relationship between UnitedHealth Group and Ingenix as a gross conflict of interest. For critics freelance of Cuomo, it a contributJohn Carroll, aand allieswriter, has beenalso points to aeditor of MANAGED CARE for six years. that they ing potentially bigger bill for payers would be asked to foot when the UCR is calculated properly. A settlement could also require UnitedHealth Group to divest itself of Ingenix. For Cuomo, it’s another “gotcha” moment in what appears to a number of industry insiders as a widening challenge to managed care. And like Cuomo’s last successful effort, which produced new rules acceptable to health plans and doctor groups governing how insurers rate physicians, the effect is intended to extend far beyond state lines. Cuomo subpoenaed 16 other large insurers, including Cigna and Aetna, as part of an ongoing investigation. Ingenix did not respond to requests for comment. Unlike the recent rating compromise, though, the fraud charges that Cuomo has leveled are spurring resistance from health plans and industry leaders who say that this time, the AG is attacking one of the linchpins of managed care’s cost containment strategy. The UCR system, they say, is used to persuade members to stick with physicians who are willing to trade lower rates for access to more patients. Those $200 office visit charges are exactly the kind of costs health plans are out to thwart. Instead of shifting health care costs onto insurers and self-insured employers, new formulas could be easily rolled out that would leave costsharing at the same level that it is now. The difference between what Cuomo found at doctors’ offices and the rates that Ingenix calculated from actual billings could have a lot to do with a disconnect between a provider’s retail rate compared to the rate he negotiates with an insurer, says Mark Rucci, senior vice president of Gallagher Benefit Services, a benefit consulting group. Rucci explains that doctors can set their retail (out-of-network) rate at whatever level they 8 MANAGED CARE / APRIL 2008
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