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HEALTH INSURANCE LOBBYISTS TRYING TO WATER DOWN NEW HEALTH REFORM LAW

Updated on March 12, 2011
ANGELA BRALEY, WellPoint CEO was paid $13.1 million last year.
ANGELA BRALEY, WellPoint CEO was paid $13.1 million last year.

5-16-10 Health Insurance Lobbyists Are Trying to Water Down New Health Reform Law

It shouldn't surprise anyone that the health insurance lobbyists, after fighting to prevent the passage of the new health reform law last year, are now trying to water it down. Their efforts are focusing on the portions of the bill that prohibit "unreasonable" premium increases and the requirement that 80 percent of the premium dollars be spent on true medical costs for patient care, exclusive of profits, administrative costs, bonuses for insurance company CEOs and the like. Premiums in excess of a "minimum loss ratio" must be refunded. These provisions in the bill left the definitions of "unreasonable" premium increases and exactly what are "true medical care costs" up to the rule makers. And this is where the lobbyists are currently focusing their efforts according to the article in today's NY Times linked below.


4-1-09 UnitedHealth Group Testifies Before Congressional Skeptics Reed Abelson in the NY Times

If two UnitedHealth Group executives meant to defuse an insurance industry controversy when they appeared before a Senate panel on Tuesday, they did not appear to succeed.

“We need to be vigilant and stay on you like white on rice,” Senator Claire McCaskill, Democrat of Missouri, said in response to the executives’ insistence that their company had done nothing wrong.

The specific issue was whether databases operated by a UnitedHealth unit had enabled various insurers to shortchange consumers systematically on reimbursements for using doctors outside the insurers’ own networks. But with the insurance industry’s future largely in the hands of lawmakers as Washington ponders health reform, the executives’ testimony seemed to invite more scrutiny of industry practices.

Andrew Cuomo, NY Attorney General

1-16-09 UnitedHealth Group $350 Million Settlement Facing Protest NYTimes article by Reed Abelson

The insurance giant United Health Group said Thursday that it had reached a $350 million deal to settle class-action lawsuits claiming it had underpaid patients and doctors. However, a plaintiff's attorney has filed an objection to the proposed settlement, stating "We believe the amount agreed to is inadequate and does not reflect as meaningful a settlement as could be negotiated.

Here's a link to the NYT article

Is anybody surprised that a company headed until recently by Dr. William McGuire who was forced to disgorge $618 million a couple of years ago for backdating his stock options has been cheating doctors and patients as well as stockholders? Time to take the health insurance company parasites out of our health care system!

1-13-09 UnitedHealth Group Settles With NY Attorney General for $50 Million

The New York Times reported today that UnitedHealth Group, the country's largest health insurer reached a settlement with the Attorney General of New York, Andrew Cuomo, ordering the insurer to update its data base, used by the entire health insurance industry, to determine how much of a medical bill is paid for fees from an out-of-network doctor.

Mr. Cuomo's office stated that the health insurance industry had used a scheme to "defraud comsumers" by systematically underpaying patients by hundreds of millions of dollars over the past decade. Cuomo's investigation estimated that the data supplied by United Health care had understated the true rates of medical care by up to 28 percent.

The New York settlement will affect insurers and patients throughout the country because UnitedHealth Group operates the data bases used by the entire industry, through its Ingenix business unit.

The settlement calls for the creation of an independent data base to be run by a university yet to be selected.

Under the agreement, United Health Group will pay $50 million to finance the creation of the new data base which will determine the prevailing costs of medical care in specific regions.

United Health Group did not admit wrongdoing, stating that it stood by the quality of the information in its data base.

Criminal charges are not being brought against United Health Group, nor was United Health Group required to pay restitution to consumers, although the disputed reimbursements are the subject of class action lawsuits.

United Health Group Settlement report by the New York Times

Willam McGuire, MD, former CEO United Health Group

NY Times Editorial 1-16-07

Editorial

Not So Reasonable and Customary

 Published: January 16, 2009

Patients who feel ripped off whenever they use a doctor outside their insurance company’s network should benefit from two important new agreements.

The Board Blog

Additional commentary, background information and other items by Times editorial writers.

Related

Times Topics: UnitedHealth Group Inc.

New York State’s attorney general, Andrew Cuomo, and UnitedHealth Group, one of the nation’s largest health insurers, have agreed to set up a new system for calculating out-of-network payments.

UnitedHealth also has agreed to pay $350 million to settle class-action lawsuits brought by the American Medical Association and other groups on behalf of patients and doctors who claimed to be shortchanged for services provided out of network. Before approving the settlement, the courts will have to decide if the amounts agreed to are enough.

Typically, when patients use non-network doctors, their insurance company agrees to pay 70 percent to 80 percent of the “reasonable and customary” charges for a given medical service in the same geographic area. If the doctor’s bill is higher than that rate, the patient must make up the difference or the doctor must settle for less.

The rub comes in defining what is reasonable and customary.

That calculation for most of the industry is made by a company called Ingenix, which conveniently is owned by UnitedHealth. The whole system is rendered suspect by an obvious conflict of interest: If Ingenix pegs the customary rates low, it keeps insurance reimbursements low and shifts more of the cost to the patient.

Investigators for Mr. Cuomo contend that UnitedHealth and Ingenix have been manipulating the data through a variety of stratagems to keep the customary rate calculation low — and the insurance payments low.

Based on their own data collection and calculations, the investigators estimated that insurers have systematically underpaid New Yorkers for medical services by 10 percent to 28 percent, depending on where they lived.

UnitedHealth neither admits nor denies any wrongdoing, but the company does acknowledge the inherent conflict of interest and is paying substantially to put the issue to rest.

As a result of the agreement, future reimbursements should be less subject to manipulation and a lot more transparent. UnitedHealth is planning to close its Ingenix databases and shift responsibility to an independent nonprofit organization — possibly a university-level school of public health — that will be the sole arbiter of data collection and calculation methodologies.

UnitedHealth will contribute $50 million to help get the new system operating. Aetna has separately agreed to contribute $20 million. Both UnitedHealth and Aetna will use the new database.

The new organization will also create a Web site where consumers around the country can find out the prevailing charges for out-of-network medical services in their area. That would allow them to determine in advance what their insurance company will pay — and make it easier to challenge doctors’ charges that appear excessively high.

We urge other big insurers to contribute to this new organization and use the new database. The potentially corrupting influence of industry financing should be mitigated by putting Mr. Cuomo in charge and possibly setting up an endowment to keep the new organization independent.

New York’s attorney general deserves thanks for forcing the industry to adopt a fairer and more transparent system for determining out-of-network reimbursements. It has been a long time coming.

More Articles in Opinion » A version of this article appeared in print on January 17, 2009

Comments

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    • Ralph Deeds profile imageAUTHOR

      Ralph Deeds 

      8 years ago from Birmingham, Michigan

      It shouldn't surprise anyone that the health insurance lobbyists, after fighting to prevent the passage of the new health reform law last year, are now trying to water it down.

    • Kebennett1 profile image

      Kebennett1 

      9 years ago from San Bernardino County, California

      Interesting. Union Pacific Railroad uses UHC and that is who we are insured by!

    • Ralph Deeds profile imageAUTHOR

      Ralph Deeds 

      9 years ago from Birmingham, Michigan

      Update on UnitedHealth Group.

    • Ralph Deeds profile imageAUTHOR

      Ralph Deeds 

      9 years ago from Birmingham, Michigan

      UnitedHealth Group $350 million tentative settlement payment for underpaying patients and doctors hit a snag.

    • profile image

      ColdWarBaby 

      9 years ago

      No Ralph! That's the capitalist mantra.

    • Ralph Deeds profile imageAUTHOR

      Ralph Deeds 

      9 years ago from Birmingham, Michigan

      Well, I wouldn't exactly go that far! But tnx for the comment!

    • profile image

      ColdWarBaby 

      9 years ago

      Shining examples of free market capitalism. This is the cream of the crop that has sprouted from the seeds of capitalism. This is the best of the best and the very essence of the capitalist system.

      Buy or Die!

    • eovery profile image

      eovery 

      9 years ago from MIddle of the Boondocks of Iowa

      Thanks for info.

    • LifeDesign profile image

      LifeDesign 

      9 years ago

      No surprise here. What a bunch of crooks!

    • Ralph Deeds profile imageAUTHOR

      Ralph Deeds 

      9 years ago from Birmingham, Michigan

      Yep! Thanks for the comment! Also, United Health Group is pushed by AARP which makes me wonder about AARP as well.

    • TheMoneyGuy profile image

      TheMoneyGuy 

      9 years ago from Pyote, TX

      I have a feeling these guys are really dirty, They are the Insurance Company behind Tricare, which was a privatization effort for military medical care. You talk about lots of oppurtunity for fraud and noboday to check up on them either. Anyway, I hated dealing with them.

      TMG

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