UnitedHealth Care Must Overhaul Databases Used to Pay Non-par Claims

New York state attorney general Andrew Cuomo has ordered UnitedHealth Care (UHC) to overhaul the Reasonable and Customary (R&C) Charge databases it uses to determine how much to pay when an enrollee uses a non-participating provider. Ingenix, a subsidiary of UHC, controls the databases.

Many other health insurance carriers use Ingenix databases to pay claims. The attorney general’s office said, by using these databases, the health insurance industry had engaged in “a scheme to defraud consumers” by systematically underpaying patients. A one-year investigation found the data had understated the true market rates of medical care by as much as 28%.

The order to overhaul the R&C databases is part of a settlement with UHC. It requires the creation of a new, independently operated database, to be run by a university to be determined. UHC will pay $50 million to create the new database. In the interim, Ingenix is allowed to continue operating. No criminal charges have been sought in the case, nor was UHC required to pay restitution to consumers.

When choosing a health care provider, Empire Plan enrollees should keep in mind that using an in-network or par provider is the least costly option. Enrollees only have to pay a copayment, if any. When a non-network or non-par provider is used, the enrollee has to satisfy a deductible and pay coinsurance, plus any balance exceeding the R&C charge.