NY Attorney general: $100M settlement from health insurers will fund independent cost database

NY AG: Consumers can soon access health cost info

SYRACUSE, N.Y. — Consumers across the country soon will be able to find impartial information about out-of-network health care costs on a new Web site, New York Attorney General Andrew Cuomo said Tuesday.

The information will be collected by a new not-for-profit company, FAIR Health, in partnership with a research consortium based at Syracuse University, Cuomo said.

The new database “will bring much-needed transparency, accountability and fairness to a broken consumer reimbursement system” and could benefit more than 100 million Americans nationwide, Cuomo said.

“Before you leave your house you will be able to look up the exact procedure you’re going to have and you will know what the cost is, so when you get to the doctor’s office, there will be no surprises for you or the doctor,” Cuomo said.

The web site also will give consumers information on how much they are likely to be reimbursed by their insurance company for using doctors outside of their network, based on the costs of health care services in their area.

Health insurers are putting up nearly $100 million to develop the database, one product of a January 2009 settlement reached by Cuomo with UnitedHealth Group Inc., the nation’s second-largest health insurer, the attorney general said.

Cuomo secured agreements with more than a dozen of the largest health insurers to end their use of a database developed by UnitedHealth subsidiary Ingenix Inc. They used the information to set their out-of-network payments to physicians, hospitals and other health providers.

Insurers often promise to cover as much as 80 percent of those rates for claims from providers outside their network. However, Cuomo’s investigation found that Ingenix had a vested interest in helping set rates low, thus allowing companies to underpay patients for out-of-network services by as much as 28 percent.

Cuomo said the Ingenix database intentionally skewed “usual and customary” rates downward through faulty data collection, poor pooling procedures and the lack of audits.

The new database, to be operated independently by FAIR Health, will remove the conflict of interest and determine fair out-of-network reimbursement rates for consumers throughout the United States, Cuomo said. It also will be an aid to researchers and engine for health care reform, he said.

Cuomo said officials hoped to have the database and consumer Web site operating within a year.

Don Nathan, a spokesman for Minnetonka, Minn.-based UnitedHealth, said insurers have agreed to use the new database for five years.

“It’s important that this information remain public, and it’s good that there will be increased transparency on physician charges,” he said. “That helps consumers, and that helps the health systems.”

Health insurers contend the prices doctors charge for care can vary a great deal across the country.

“Hopefully this database will help shed light on the exorbitant prices that out-of-network providers are charging for some services,” said Robert Zirkelbach, spokesman for the trade group America’s Health Insurance Plans.

Associated Press writer Tom Murphy in Indianapolis contributed to this report.