What Products Does the Ingenix Class Action Suit Cover?

Ingenix, based in Minnesota, is a company that created a database to calculate ‘out-of-network’ payments and Ingenix also does consulting, billing, drug trials and many other data-crunching services for thousands of doctors, insurers and hospitals. Back in 2006 a fraud case was filed by the New York Attorney General, Andrew Cuomo against Ingenix, a small but fast-growing technology arm of UnitedHealthcare.

Cuomo charge Ingenix with posting phony rates in its database, for example: a $100 office visit might be reimbursed as a $72 visit, leaving the patient with a bill for the remainder. In January of 2009, UnitedHealthcare has settled out of court, a class action lawsuit brought on by the American Medical Association, in the amount of $350 million. Under the settlement, Unitedhealthcare will create a new database on ‘out-of-network’ rates.  But the repercussions across the medical industry has rippled across the technology industry and the insurance industry as well, which may result in the demise of Ingenix.

The technology issue is now there needs to be regular audits on key databases, audits that will maintain the accuracy of information the database contains, which will increase the risk of companies relying upon the databases. Risks such as databases that include value judgements, like quality of care, and how often the databases will be audited, how transparent should they be and when should patients and doctors be notified if changes are made in the database. A whole new industry in auditing database content will spring up, along with a whole new set of laws.

As for the insurance industry, there is still a heated debate about health insurance companies about how they are exempt for federal antitrust laws, the same laws that every private market must adhere to in order to keep the market competitive. The health insurance industry, unlike any other private industry in the country is allowed to engage in price fixing, market allocation and bid rigging. A bill was introduced in 2009, after the Ingenix debacle, which would repeal the antitrust exemption for health insurance providers.

This entry was posted on Friday, March 5th, 2010 at 2:02 pm and is filed under Product Related. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.


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