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United Health Care Group owns a subsidiary, Ingenix, Inc. One of the things Ingenix does is to keep databases of physician charges. These are used when a patient seeks care outside the insurer’s network. The insurance company agrees to pay a fraction of the so-called UCR charge (Usual, Customary and Reasonable.) The patient is personally responsible for the balance.
So, Ingenix uses out-of-date data to determine artificially low UCRs. The insurance company pays its fraction, and the patient gets stuck for the rest. But wait! It gets better! Ingenix signed contracts with its data providers to hide the databases from providers and consumers!
How do we know this? The NY Attorney General reached a settlement with some insurers known to use the Ingenix database. Ingenix is going to be phased out of the out-of-network business in favor of a not-for-profit research entity that will determine UCR rates.
How much lower than the actual rates were they? According to the Senate Commerce Committee, in New York State they were as much as 30% below market. So, if we suppose for a moment that you need surgery, and you want to use an out-of-network surgeon. He charges the prevailing rate of $1000 for the surgery. Now, if DenialCare (h/t Tom Batiuk) pays 80% of what it calls the UCR and using Ingenix’s database that’s 30% below market, they say the UCR is $700. DenialCare pays 80% of that, or $630. Who’s on the hook for the other $370? You are! Yeah, you owe your surgeon $370, instead of the $200 you should owe him. DenialCare just saved itself $170 (or they stole $170 from you with a rigged database.)
But wait! There’s more! You don’t live in New York, you say? Ingenix data is used throughout the health care industry. And the confidentiality clauses in the contracts prevent you or your doctor from figuring out how that crazy-low UCR was determined. That’s just how it is.
And people ask why we need a public option? Here’s another reason, folks.
Oh yeah? Can you say, class action lawsuit, boys and girls? I knew you could!
11 Comments
Wow, thanks. Now do you think anybody outside this committee will read this?
Max Baucus was interviewed on June 18 and said that there was no support for single payer in the House or Senate otherwise there would be single payer bills. Huh? Reading and keeping up with the news is not one of their duties.
Actually, it’s worse than the executive summary makes it appear. When I read the executive summary, it appeared that Ingenix was low-balling by not updating.
Oh, and in at least some cases you’re paying substantially higher premiums for the right to be covered out-of-network. When Mrs. BC got called in for a repeat mammogram (no problems, everything’s okay), I reviewed our insurance coverage and changed to BC/BS at the next open season so we’d have the option of going out-of-network (like to Mayo West in Phoenix or MD Anderson) if we needed to. Our premiums went up quite a bit, but I slept better.
While Ingenix might have been doing that, it turns out that Ingenix gets its data from (wait for it): the health insurers. Yeah, the very people who are supposed to pay your claim are sending in the data which determines the payment of your claim. Conflict of interest, much?
Aetna had a policy (in violation of their agreement with Ingenix, but WTF we’re all one big happy cartel) of shaving the top 20% of bills before the data were sent to Ingenix. So, if you looked at Aetna’s data as sent to Ingenix, what appears to be the 100th percentile is really the 80th percentile. Think it matters, much?
Katymine, if you’re reading this, get a copy of the Senate report and go see an attorney, today!
More to the point, will any of the Senators on the !@#*ing committee read it?
why does congress think it is more important to save this industry than it is to save lives?
Why is there air?
Actually, you know the answer as well as I do. Al, my barber, puts it very pithily: “Money talks, and bullshit walks.” This industry spends tens of millions annually to buy the good will of our representatives. And that money buys them very good will, indeed.
This is yet another argument for public financing of political campaigns. Although we really shouldn’t need another argument for it.
so sorry. did not expect an answer, was only venting my frustration.
I’ll publish my diary that’s been sitting as a draft with an audio of Baucus being interviewed and my take on Senators as managers and not engineering or architect brain or empathetic brains.
I was at a Montana health care forum last night sponsored by some mushy middlers in which they got a DLC Third Way guy to explain the different health care reform plans. Fortunately a bunch of us single payer advocates were able to correct him on some…um…misconceptions. A bunch of Montanans went to Washington last week to meet with Baucus. None of them got a meeting with him but only his staffers who “gave us civics lessons” in how bills get passed. Mostly a cold bunch. They had more luck with Tester.
Wish us luck that our Single Payer float (A sick Lady Liberty being nursed by doctors and nurses) wins the prize in the largest 4th of July parade in Montana. That will give Max another message.
Ooops.
I guess I provided the answer for anyone who hasn’t been listening. But it is really frustrating. I discovered this one this morning. I’d love an explanation for how the MSM missed this report.
And I really want people who have been damaged by this disgusting abuse of my profession to file lawsuits.
Perhaps for the same reason that protecting AIG and its counterparties was more important than stopping a depression: any move to correct or even investigate the health insurance industry brings down the whole tottering house of cards.
I very much doubt that the health insurers are any sounder than banks. The tremendous consolidation and the absurdly high profits claimed suggest shenanigans. I doubt that even the quasi-criminal activity we know about–the cost-shifting, claims denial, and this Ingenix scheme–can sustain this kind of moneymaking when you consider that healthcare is actually expensive. Somewhere, someone has to be claiming capital as profit and skimming it off in bonuses and dividends and whatnot.
“Here are the numbers from OpenSecrets.org:
Max Baucus:
Health Industry Total: $1,720,449
DETAILS:
Health Professionals $499,641
Pharmaceuticals/Health Products $494,313
Health Services/HMOs $345,500
Hospitals/Nursing Homes $344,326
Barack Obama:
Health Industry Total: $18,803,350
DETAILS:
Health Professionals $11,532,962
Hospitals/Nursing Homes $3,205,041
Insurance $2,211,348 “
http://www.afterdowningstreet.org/node/44061
The health professionals side of things is really indeterminate, a lot depends on which health professionals contributed. If it’s the AMA, well, they’re perfectly happy with the status quo. If it’s the American Nurses Assoc, well, they want single payer. Most of the specialty organizations of physicians want serious reform, too. If it’s individual physicians, who knows?
The key numbers there are BigPharma and Insurance. They’re very happy with the status quo. In fact, I doubt anything would make the insurance industry happier than a purchase mandate with enforcement teeth, and no enforcement on the coverage requirement side.