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Out of Network Health Insurance Overcharges

The New York Attorney General's Health Care Report has determined that the Consumer Reimbursement System is 'Code Blue': they found its database to be "unreliable, inadequate and wrong". For the past year, legal experts have been conducting investigations into allegations that health insurance companies conspired to reduce insurers' reimbursements by charging them with too much of the cost of out-of-network care.

Health Care CostAllegedly, some of the nation's biggest health care companies underpaid millions of people across the country when it determined insurance reimbursements for out-of-network care. The companies include Aetna, Blue Cross Blue Shield, Cigna, Health Link, Unicare, United Health Care, and Wellpoint/Anthem, and their subsidiaries.

Most health insurers use schedules compiled by Ingenix, Inc. ("Ingenix") in determining reimbursement rates for out-of-network care. Investigators revealed that a monopoly was created through Ingenix: the Ingenix database is supposed to fairly reflect the market where the consumer lives. However, as a wholly-owned subsidiary of UnitedHealth, Ingenix has a conflict of interest in preparing schedules that are supposed to fairly reflect the market.

How it Works

Ingenix gathers billing data from the largest health insurers in the country and then sends back schedules to those health insurers and others, based on the pooled data, which the insurers use as a benchmark to set their reimbursement rates.

Health insurers allegedly manipulated the data they submitted to Ingenix so they could depress reimbursement rates based on the data pool, which forces consumers to pay more. According to the New York Attorney General, the insurers and Ingenix manipulate the data to skew the "usual and customary" rates downward. This means that many consumers were reimbursed far less than they should have been for out-of-network medical services. The Healthcare Industry Taskforce Office of the New York State Attorney General found that the Ingenix databases understate market rate by up to 28 percent across the state for an ordinary doctor's office visit: this means losses of hundreds of millions of dollars for consumers over the past ten years in the United States.

As well, the consumer doesn't know before choosing a doctor what reimbursement rate to expect from the insurer because Ingenix databases are a "black box" to the consumer.

Consumer Settlements

Since its investigation, the New York Attorney General's office announced settlements with United Health and some other insurers over the artificially low reimbursement. Under the settlements, Ingenix will no longer provide the data to establish the "usual and customary" rates; instead, a new, independent database run by a qualified nonprofit organization will determine the rates.

Wellpoint, the country's largest health insurer, agreed to pay $10 million to settle allegations of price fixing brought by New York State's Attorney General Andrew Cuomo. WellPoint is now the seventh insurer to end its relationship with the defective Ingenix database and it agreed to pay $10 million to a qualified non-profit organization that will establish a new, independent database to help determine fair out-of-network reimbursement rates for consumers throughout the US.

Also, the New York Attorney General has negotiated reimbursements for some customers of New York health plans. However, the New York Attorney General cannot do the same for residents of other states.

Other Insurance Companies Under Investigation

Many health insurance companies go by different names. One is WellPoint, Inc., one of the nation's largest health insurance companies. WellPoint serves customers throughout the United States, under various names and subsidiary companies, or affiliates including the following:
  • Anthem Blue Cross and Blue Shield
  • Anthem Blue Cross Life and Health Insurance Company
  • Anthem Life Insurance Company
  • Anthem Life & Disability Insurance Company
  • Blue Cross and Blue Shield of Georgia, Inc.
  • Blue Cross of California (Anthem Blue Cross)
  • Empire BlueCross BlueShield
  • Empire BlueCross BlueShield HMO
  • Golden West Health Plan, Inc.
  • HealthKeepers, Inc.
  • HMO Colorado, Inc.
  • HMO Nevada
  • HMO Missouri, Inc.
  • Machigonne, Inc.
  • Peninsula Health Care, Inc.
  • Priority Health Care, Inc.
  • UNICARE Health Insurance Company
If you believe your health plan used inadequate "usual and customary" rates to pay your out-of-network doctor, and you had to pay the difference, you should seek legal help.

Medical Out of Network Overcharge Legal Help

If you or a loved one has suffered damages in this case, please click the link below and your complaint will be sent to a lawyer who may evaluate your claim at no cost or obligation.
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Keeping Track of Out-of-Network Services
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May 26, 2009
Louisville, KY It can be daunting enough trying to keep track of which doctor's visits might lead to out of network overcharges but the truth is that it is important to be in the know, so that you do not get stuck with unexpected out of network fees. People might assume that because their hospital is in network, no procedures at the hospital will be considered out of network services. However, some procedures at an in network hospital can be considered out of network. Furthermore, a hospital that is considered in network one day one could be considered out of network the next.

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Oakland, CA When it comes to understanding health insurance, some of the most complex issues may revolve around out of network medical expenses. Out of network charges can be costly and they can be unexpected. That is because many people may not be entirely clear on what constitutes out of network medical care. Even within one facility, various procedures may be considered out of network services, and can carry high fees.

Patients Allegedly Over-Billed for Out Of Network Medical Care
Patients Allegedly Over-Billed for Out Of Network Medical Care
May 5, 2009
New York, NY It is probably little surprise to anybody who has dealt with health insurance companies that once again those companies are being accused of less than honest business practices. This time, those practices involve out of network physicians and the ways that insurance companies decide on reimbursement rates for out of network medical care.


Posted by

I was admitted from the emergency room into the hospital and taken to surgery by an out-of-network doctor. The surgeon/trauma doctor on call and was not contracted with our insurance company because he only sees patients emergently, and this was an emergency situation. I did not have a choice of doctors, I was treated by the physician on call and I feel I should not be penalized for getting a non participating physician in an emergency situation. I also feel since I went to a participating facility that my policy should have covered the claim for the doctor.

Posted by

In 2005 I had two cancer operations that required plastic surgery. My doctor sent me to "the best". He did a fantistic job. United Healthcare paid for the first one but denied $2,005 for the second one because the Dr. was "out of network".


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