Thursday, February 19, 2009

WellPoint Settles

As reported by the Indianapolis Star (among others), the large health insurance company/ managed care organization WellPoint is the latest company to settle charges related to its use of a questionable data-base to determine payments for out of network care:

WellPoint has agreed to pay $10 million to settle an investigation by New York Attorney General Andrew Cuomo into questionable insurance reimbursements in that state.

The Indianapolis-based insurer becomes the seventh major health benefits company to settle in what authorities called an industrywide scheme to defraud consumers.

Cuomo charged the insurers with setting artificially low reimbursement rates to doctors who weren't in their health networks.

At the heart of the investigation is Ingenix, a unit of insurance giant UnitedHealth Group, which operated a database commonly used by health insurers to determine payment for out-of-network care.

Cuomo said Ingenix operated a'defective and manipulated database' and that insurers underpaid members for their out-of-network care.

Because it was owned by UnitedHealth, the database company had a vested interest in helping set rates low, so companies could underpay patients for out-of- network services, Cuomo said Wednesday in a statement.

WellPoint said it acknowledged the conflicts of interest in the database that Cuomo's investigation brought to light.

'We support his efforts to increase the transparency of health care costs,' said Ken Goulet, executive vice president and chief executive of WellPoint's commercial business, in a statement.

This is hardly the first time we have discussed questionable actions by WellPoint on Health Care Renewal. Our most recent post on this company was here. Yet despite the many transgressions made by this company, nobody seems to have taken responsibility for any of them, none of its leaders have apparently suffered any negative consequences for them, and the company's general reputation seems not to have suffered.

We have posted before about the Ingenix database here. To repeat, the most curious thing about this case is how so many major health care insurance companies/ managed care organizations used the same data-base, created by one of their competitors. Why are ostensible competitors collaborating so? If we are supposed to be basing our health care system on free markets and competition, why is this apparent cooperation among supposed competitors not raising at least eyebrows?

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