Ingenix gets its comeuppance

For quite some time, complaints had been piling up over the rates U.S. health plans were paying for out-of-network charges. Doctors were upset because the rate base was low, and patients were unhappy because they were saddled with fees well above what their health plans would cover. This year, doctors and one state attorney general got angry enough to force some big changes.

The common thread was Ingenix, a UnitedHealth Group company that ran the database most large health plans were using to set such rates. Critics said that Ingenix was consciously setting rates at well below market levels, though execs denied it, claiming their numbers were based on detailed market assessments.

Be that as it may, Ingenix lost the battle. Eventually, New York state Attorney General Andrew Cuomo went after 16 plans that used  Ingenix data, and the AMA hit Ingenix with a $300 million class-action suit, both accusing the UnitedHealth subsidiary. Ingenix ultimately agreed to pay the $300 million, plus $50 million more to establish a new physician-payment database. This new rate-setting database would be run by an outside non-profit organization.

In January of this year, Aetna became the first of several customers to settle with Cuomo over its use of Ingenix data, agreeing to stop using the database and kick in $20 million to help establish the new non-profit. During the course of this year, Cigna and Health Net agreed to similar terms.

While the database still hasn't launched, it seems likely that when it does--most likely in mid-2010--it will be a pretty big day for physicians. Stay tuned on this one.

Related Articles:
Ingenix database faces federal going-over
Study: Ingenix data used throughout health plan industry 
Ingenix out-of-network payment data to be replaced