Two-Thirds Of Health Care Insurers Deliberately Use Faulty Data To Overcharge Patients

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WASHINGTON — Congressional Investigators said Wednesday two-thirds of the U.S. health insurance industry used a faulty database that overcharged patients for seeing doctors outside their insurance network, costing Americans billions of dollars in inflated medical bills.

The flawed database is operated by Ingenix, a subsidiary of health insurer UnitedHealth Group, which agreed in January to pay $350 million to settle allegations that it deliberately kept rates low to underpay doctors, driving up expenses for patients.

An investigation by Sen. John Rockefeller, D-W.Va., shows that nearly 20 regional and national insurers also used Ingenix data. An ongoing probe by New York Attorney General Andrew Cuomo previously focused on the use of Ingenix data by only a handful of top insurers, including Aetna, Wellpoint and Cigna. About a dozen insurers, including UnitedHealth, have already reached settlements with Cuomo.

Tuesday's report arrives as President Barack Obama and Democrats in Congress step up calls for a Public Health Care Option. The idea is vigorously opposed by Republicans and insurance industry executives, who say a public plan would drive private companies out of the marketplace.

More than 100 million Americans have plans that allow them to see doctors who are not part of their insurance network. For more than a decade, insurers submitted data to Ingenix to determine the typical cost for care received outside their networks.

But congressional investigators say companies would deliberately skew data to underestimate the costs of medical services, leaving patients to pay more in out-of-pocket expenses.

"The result of this practice is that American consumers have paid billions of dollars for health care services that their insurance companies should have paid," states the report from the Senate Commerce Committee's investigative staff.

In one case, Aetna allegedly eliminated the highest 20 percent of medical charges before sending the data to Ingenix, according to expert court testimony cited by congressional investigators. Once the data was handed over to Ingenix, officials there "scrubbed" the numbers again to further curb charges, according to the testimony.

Aetna denied the allegations in a statement Wednesday, saying they stem from a lawsuit against another insurance company. Aetna was not party to the case.

A Senate Commerce Committee spokesman stood behind the report's statements, saying they stem from evidence given under oath by Aetna in a court proceeding.

UnitedHealth has admitted no wrongdoing in its handling of Ingenix, though it agreed to close the database and help fund a new one operated by a nonprofit group.

Rockefeller and other lawmakers are pushing for additional changes in the insurance marketplace. A bill from the West Virginia senator, who chairs the Commerce Committee, would compel companies to use simple, standardized language to describe insurance policies.

"Consumers can't challenge insurance company decisions because the companies don't explain terms of coverage in understandable language _ I would say deliberately," said Sen. Rockefeller, at a hearing Tuesday.

Former insurance executive Wendell Potter told lawmakers that companies deliberately use difficult language to mislead consumers about the scope of their benefits.

"Insurers know that policyholders are so baffled by those notices they usually just ignore them or throw them away," said Potter, a former Cigna executive. "And that's exactly the point. If they were more understandable, more consumers might realize that they are being ripped off."

Potter urged senators to pass the public health plan proposed by Obama, saying it would bring more transparency and higher quality to the health insurance industry.

Sources: Huffington Post, MSNBC, UPI