UnitedHealth Group Accused Of Fraud

New York Attorney General Andrew Cuomo is going after UnitedHealth Group, accusing them of “rigging data” and systematically “under-reimbursing” their members for out-of-network expenses.

From the New York Attorney General’s office:

Under the United insurers’ health plans, members pay a higher premium for the right to use out-of-network doctors. In exchange, the insurers promise to cover up to 80% of either the doctor’s full bill or of the “reasonable and customary” rate depending upon which is cheaper.

The Attorney General’s investigation found that by distorting the “reasonable and customary” rate, the United insurers were able to keep their reimbursements artificially low and force patients to absorb a higher share of the costs.

“Getting insurance companies to keep their promises and cover medical costs can be hard enough as it is,” said Attorney General Andrew Cuomo. “But when insurers like United create convoluted and dishonest systems for determining the rate of reimbursement, real people get stuck with excessive bills and are less likely to seek the care they need.”

Cuomo’s investigation also found a clear example of the scheme: United insurers knew most simple doctor visits cost $200, but claimed to their members the typical rate was only $77. The insurers then applied the contractual reimbursement rate of 80%, covering only $62 for a $200 bill, and leaving the patient to cover the $138 balance.

Cuomo’s notice of intent to sue names the following potential defendants: UnitedHealth Group and its subsidiaries, United HealthCare Insurance Company of New York, Inc., United Healthcare of New York, Inc., United Healthcare Services, Inc. and Ingenix.

CUOMO ANNOUNCES INDUSTRY-WIDE INVESTIGATION INTO HEALTH INSURERS’ FRAUDULENT REIMBURSEMENT SCHEME [NY AG]

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  1. brent_w says:

    I hope Cuomo kicks the snot out of em.

  2. m4ximusprim3 says:

    I hope I never get sick ever again. Please god, save me from insurance.

  3. ClankBoomSteam says:

    FRAUD?! A campany called “United Health Group”? Say it ain’t so!

    Seriously, I hope this leads to a French-Revolution-style uprising against the HMOs. Try them, convict them, and then force them to sign up for their own services.

  4. Crymson_77 says:

    I can’t wait until a nice hefty fine gets imposed on these f#ck#rs. I have hated United for a very long time…especially since they tried to screw my family out of money when my son was born. The plan covered 100% according to documentation…but that didn’t seem to matter until I got involved and asked just what the hell the were smoking…

  5. Crymson_77 says:

    @CLANKBOOMSTEAM: They DO use their own services, but they have this magical flag on their own accounts which allows for the actual paying of the doctors in question….without screwing their own executives… notice I didn’t mention the regular folks that work there????

  6. ClankBoomSteam says:

    @Crymson_77:

    Oh, okay. Hanging, then. :)

  7. kcrusher says:

    Everyone should know it’s ‘customary’ for insurance companies to underpay or deny a claim the first time based on ANY possible reason (or, sometimes, none at all) they can think of. They do this figuring that most people are too busy to complain/fight it and will just let it slide.

    I know – I used to work for one of these evil companies.

  8. SexCpotatoes says:

    hanging would be too good for them, flay them alive and dip them in salt.

  9. Blue says:

    Never, ever thought I say this…….Cuomo for President!!!!!!!!!

  10. azntg says:

    Thank you Mr. Cuomo! Keep up the good litigation fights (hopefully while minimizing collateral damage to us as best as possible) and I’ll vote again if you run for re-election.

  11. jaydez says:

    Holy shit! I work in the building that letter was sent to! I dont work for UHC though. But I always did wonder what all the UHC employees in the building did… now i know.. they screw their members.

    No wonder my company switched from them to Aetna last year.

  12. BoraBora says:

    How can you find out what the going rate is for a doctor’s service? I had surgery, and my insurance will only pay a very small fraction of the cost. Despite it being an in-network hospital, I was given an out-of-network doctor, though it wasn’t like I had the choice while in the emergency room. Grrrr.

  13. JiminyChristmas says:

    @BoraBora: Arrgh, I had a similar experience in the ER once. In-network hospital, out-of-network radiologist.

    I suppose I was just lying there while the nurses were picking glass and dirt out of my hide…I should have had the presence of mind to ask everyone who touched me if they accepted HealthParters Elect. Silly me.

  14. JiminyChristmas says:

    You almost have to admire the diabolical genius of these thieves. They’re like the Enron of insurance.

    One subsidiary sells insurance that pays ‘reasonable and customary’ charges. Meanwhile, another subsidiary cooks the books as to what ‘reasonable and customary’ actually is. It’s not even like you can comparison shop, because subsidiary #2 is cooking the books that most of market relies on.

    In retrospect, it’s not hard to see how Bill McGuire amassed $1.8billion in personal wealth [though he lost a few hundred million to clawbacks]:

    - Sell a product that everyone needs.
    - Rig the system so you can confound your customers and competitors with bad information.
    - Use said system to both underpay your providers and shift additional costs to the very same people paying sky high premiums in the first place.
    - Profit.

  15. pigeonpenelope says:

    i’m kind of shocked! i love united! they have gone out of their way to get me covered for a surgical procedure complete with follow ups and everything. they’ve saved me a lot of money. then again, i went with blue cross/blue shield and they sucked and before them, i was covered by the military so pretty much its hard to be worse.

  16. Ragman says:

    When our child was born, the anesthesiologist was assigned from a pool. Some were on our insurance, some were not. Luck of the draw as to save or spend $3000. We lucked out, but a friend did not and had to pay the $3000.

  17. lennonpatton says:

    This story doesn’t surprise me at all. I have been fighting this company over an ER visit from last August. They do everything they can to try and not pay valid costs. If you have this company, be very aware of the fine print and don’t get complacent. They will screw you over.

  18. the_wiggle says:

    @SexCpotatoes: forgot a step – dip in lemon juice prior to rolling in salt

  19. Superborty says:

    Wow, I count one person who is supporting United! All these HMOs are scum and deserve to get their just desserts. I am completely against nationalized healthcare but these HMOs are just plain evil.

  20. TBT says:

    Wow…the NJ case where this company got nailed is my favorite opinion of all time. I hope they continue their discovery shenanigans for my personal amusement (they’re not MY insurer…)

  21. humphrmi says:

    UHC is the worst of them, because they won’t even help you determine who is in network an not. They leave it up to you. I actually quit an employer who only offered UHC, because they only offered UHC. Health plan providers should be part of everyone’s criteria for accepting a new job, then those employers who can’t attract valuable employees because they cheap out on insurance will drop them.

  22. goodkitty says:

    @Superborty: Then I guess you’re REALLY against the Hillary/Mass. plan where you get to be legally obligated by the gov’t to give money to one or more of these evil corporations. I rarely get shocked and scared when I hear candidates/politicians speak, but that one actually still worries me a bit.

  23. j3s says:

    And, of course, any judgement or settlement they end up paying will be 1/10000000000000000000000000th of what they’ve bilked from their members over the years. A proven, yet unfortunate, sound American business strategy.

  24. nrwfos says:

    @JiminyChristmas:
    There are no in-system radiologists. You can believe that the radiologists all know this (or at least their accounting company does) because the radiologists are the first guys to bill you, the first guys to start harrassing you, and the last ones that will get back to you with remaining balance a year after the insurance and FLEX people are handling it. I know this from personal experience…several of them.

    @BoraBora:Make sure that the doctor you got (insist one this) is sure to tell the insurance company that you were treated in the hospital and not in the office. This can make a huge difference in the amount they will (can be made to ) pay. Be sure to befriend whoever is the billing person at that doctor because if you stay in contact with them and tell them what’s going on they can continue to bill the insurance company. And you be sure to tell the insurance company that you had no choice since it was an emergency to the hospital. You have to stay on the insurance company at all times. Never give up.

    @humphrmi: Being sure about which insurance company your employer gives you won’t really work. Our employer has changed insurance companies every year, literally. Then when the employer was acquired by another company, a new insurer was foisted upon us in the middle of the year and we had to pay a second deductible that year.

    As for HMO’s – I can only speak for PPO’s because that’s all we’ve had since I have certain doctors that I need to stay with because of my history.

  25. Trai_Dep says:

    Well, thank the gods we don’t go with Single-Payor health. Because the private market provides such a more humane, economic, fair and efficient system than all alternatives! No. Really!! Uh-huh!!!

  26. Jesse in Japan says:

    Andrew Cuomo is like the coolest attorney general ever.

  27. chemman says:

    @BoraBora: I had the exact same experience, but I continued to call the insurance company and complain that I was treated at a network facility and had no choice in the doctor. They eventually paid it after about 7 months and 15 calls. They would claim it was handled until a month later I get a billing service call. They were hoping I’d just get frustrated and pay, but it was a rather large bill and the principle of it pissed me off. By the way, my problem was with UHC, big surprise!
    Afterwards, I met someone at a party who used to work there that claimed what I went through was common practice and that they were supposed to pay those out of network doctors at in network facilities, but they used it as a way to get customers to pay more of the costs. So it doesn’t surprise me UHC is pulling this billing crap too!

  28. bhz says:

    If that is indeed the letter sent to United, then Cuomo’s office must not keep up with the latest news, Bill McGuire is no longer the CEO of United.

    Although, New York would love money from UNH, they have their sites on Amazon.com too. They should get an Attorney General that actually knows facts though, like who to send the correspondence to.

  29. vdragonmpc says:

    I still want my premiums refunded by UHC as they refused to offer any alternatives to no treatment for my wife. I also quit my job over the healthcare provider. I couldnt afford to pay premiums that only really was a prescription discount card/checkup plan and then pay the full costs of treatment.
    Could we get Cuomo to run for VA attorney general? Virginia doesnt care at all what goes on with the HMOs.

    Question: Why do pain clinics and others have United Healthcare banned from their clinics? They require payment UP FRONT if you have UHC as your carrier. What is that about? Why would the company pay for the drug but not the injection procedure?

    I would like them to be SHUT DOWN all the way down. After dealing with them across multiple departments of ineptitude and actuall stonewalling. They try anything to delay and deny. Close them down.

  30. Coder4Life says:

    Why don’t they go after the people in the company that actually came up with this scheme and fire them? On top of that make sure they never get another job except for like McDoanlds.

    See we don’t need illegal immigrants idiots like this, we can have them work at McDoanlds and pick our Olives for us.

  31. MissTic says:

    Yet more proof that Grisham’s “The Rainmaker” was in fact a true tale.

  32. mindshadow says:

    Someone already touched on this, but this is still a mystery to me: Why are Americans so opposed to nationalized healthcare? And I don’t mean the Hillary “Let’s force people to pay these companies” healthcare, I’m talking about a Canadian style national healthcare system or something to that affect.

    The talking points are that our healthcare wouldn’t be as good, waits would be too long if everyone could go, and “Do you really want our government managing your healthcare?” At least those are the most common ones I hear.

    My responses are thus:

    - Why wouldn’t it be as good? Especially since right now you have to choose only the doctors your HMO wants you to go to, and in effect if doctor y is better at, say, knee surgery than doctor z but he’s out of network you’re more or less going to be forced to accept the doctor who isn’t as good or doesn’t have as high of a success rate with a something.

    -Have you been to the emergency room lately? It’s already backed up. Hell, a few weeks ago all the emergency rooms in my city, except for Children’s hospital and the VA, were on divert for ambulance drivers. Also it’s a hospital, not a country club. We’re talking about people’s well-being here.

    -Are the corporations any better? They make it fairly obvious that they’re all about profit and denying you treatment, not your health

    I’m sure I’m preaching to the choir here, and I hope you guys don’t take it as flamebait or trolling, but I just had to get that off of my chest. :

  33. arch05 says:

    @SexCpotatoes: what’s flaying?

  34. kris in seattle says:

    Oh fuck. This is my health insurance at work. Fun fun.

  35. cujsh says:

    How much time out of a busy work day can a person be expected to spend ironing out the shady insurance business practices?

    Personal opinion, at some point it seems logical to have the government intervene; or perhaps employ a 3rd party (HR) to ensure that we are getting what we paid for.

  36. MissTic says:

    @mindshadow: I don’t think people are denying that healthcare is a problem in the U.S. But let’s be specific: healthcare is already available to anyone regardless of the ability to pay. Insurance is the problem. Some studies claim that 40+ million Americans are uninsured. Out of 300 million? That’s not to say they aren’t getting care either. How many are being treated at the taxpayer’s expense? A lot. How many choose not buy private coverage because they are taking a calculated risk and financial barriers aren’t a concern? You have to dig through the rhetoric to find the facts.

    I fail to see how nationalizing our system will cure all of the problems we see (the OP being a prime example). I think there is a lot of cognitive dissonance – turning over such an important/private matter to the people who brought us the DMV? Um…hell no!

    You cannot manage an infinite demand with finite resourcess. Every single socialized system of medicine is full of problems. We also have 300 million people – scores more than in other countries.

    Besides, we already have govt run healthcare (Medicad, Indian Health Services, the VA) go look at how they are being run….it’s scary.

    I think we need to fix insurance. Perhaps allowing people access similar to auto insurance.

    I don’t know what the ultimate answer is but I know it doesn’t involve turning it over to the govt and letting them raid my pocketbook.

    And in a govt system, the best and brightest will leave medicine and turn to private care. You will create a de facto two tiered system. You think the likes of Bill Gates and Oprah are going to participate? Nope. The huge salaries some doctors recieve will disappear. Some will stay out of altruism but some will leave so they don’t have to fool with the govt. They will treat the wealthy who can afford cold hard cash.

  37. mindshadow says:

    @MissTic: Very interesting points. I’ll try to reply later when my brain isn’t fried by this stupid wireless VoIP phone.

  38. econobiker says:

    @Crymson_77:

    Then the question is- what is the flag and how do we get it or reasonable information in order to call and get it added to our accounts…

    This is something I had always wondered about- if the execs at these “health insurance” companies had to actually use the regular rank and file services- how long would service still be sh*tty???

  39. JiminyChristmas says:

    @MissTic: A response to your comment:

    …healthcare is already available to anyone regardless of the ability to pay.

    This is true only insofar as that if you show up at the ER with a life-threatening condition they can’t kick you out if you fail the wallet biopsy. Yes, many hospitals offer charity care which you can access if: a) the hospital hasn’t exhausted their charity fund for the year, b) you qualify; and c) you jump through all the hoops necessary to get private charity. And to be clear, if you are a wealthy individual, say someone who earns more than $10/hr, you could easily not qualify.

    So if you show up at the ER without insurance and receive treatment, and you can’t make an arrangement as to how it will be paid for, you will get billed and they will expect you to pay in full…regardless of your ability to pay. I’m sure you could go back through the Consumerist archives and find a story about hospitals going to court to file garnishments against the paychecks of their patients.

    I experienced all of this with a family member who had the misfortune of having a heart attack in the span of time between when he became unable to work, but before being covered under SSI and Medicaid. Yes, he got a ‘free’ triple bypass, but he also took a $200,000 medical bill to his grave. Try renting an apartment or qualifying for any sort of credit with a six-figure black mark on your credit report. It makes life difficult.

  40. BoraBora says:

    @nrwfos: Unfortunately, I did state that I was treated in a hospital. I called many, many times, and filed an appeal… which was of course denied.

  41. Thorzdad says:

    Any chance Cuomo would get tapped to become the USAG under either Dem’s administration? A kick-ass AG that really cared for the average citizen would be a welcome change.

  42. Thorzdad says:

    @MissTic: Have you actually studied how your so-called “socialized” healthcare actually works in other countries? It sounds as if you have swallowed a lot of FUD from the US industry. I suggest you read through the following articles for a look into how the Canadian system works from the perspective of someone in that system…

    [www.ourfuture.org]

    [www.ourfuture.org]

  43. richcreamerybutter says:

    @Jesse in Japan: Indeed. first he single-handedly sodomizes the student loan industry, now this. He is a badass, and I’d vote him for POTUS in a heartbeat.

    @goodkitty: I’m torn on this, but actually feel the HRC plan can provide the best of both worlds (if this is ever possible in healthcare): ensuring access to everyone while still encouraging advances and reasearch, since the incentive is usually profit-based.

  44. insurancecollector says:

    The reason that these companies can get away with this is because people don’t know anything about ERISA. People have no clue what it is, and have no idea how it can help with this very problem. A quick primer: They are Federal laws that govern all(sorry most) employee benefits. That means your health insurance from your employer!!!! These rules are very strict on how and why an insurance company can deny, delay, review, and not pay benefits (benefits is another word for your doctors bills). These rules are actually very good for consumers, but nobody knows about them and nobody uses them to appeal /fight for their benefits/doctors bills. The only people who know these rules are…. Yep….. Insurance companies and they are sure glad you don’t.

  45. nrwfos says:

    @BoraBora: What else did you do to try to convince them? Did you have the doctor’s people re-file with the specific that the doctor treated you in the hospital and not in his office? Unfortunately, that is the most effective way. Sometimes I know that people will pay the doctor and have them re-file so that if the insurance does pay you can be re-imbursed by the doctor. Of course you have to be really nice to the doctor’s people to get that done. If the insurance company knows you’ve paid …. they won’t. Does your state have an insurance board? That sometimes can help. Also a state comsumer’s advocate department can help. It all varies. I admit that I’ve been fortunate in strong-arming the insurance companies. My hospital had patient advocates as well. Try talking to the hospital especially if it’s “in-network”. otherwise keep ragging and nagging. Look into suing them. That’s the only language they hear sometimes. I don’t believe in ever giving up. If we do that they really do win and the terms of the contract they have with you don’t mean anything at all.

  46. mikelotus says:

    where are all are right wingers on this one? the silence is thundering. OK, they did this to us. My son had to take speech therapy. The nearest speech therapist in network was 30 miles away. They said as long as its within 35 miles, that’s OK. We live in the Washington DC area so 30 miles means at least a half of day off from work and school for my son. So we go out of network. They reimburse the doctor our co-payment of $35. Do you know any doctors that work at $35 an hour? (that’s $61,600 a year salary) I get paid much more than that in the computer field. So of course we pay big. Basically, their advertised “out of network” is a scam. I was taking acupuncture for my neck but my doctor dropped them because she got my $35 co-payment and they reimbursed her an additional $14. And this was in network. Needless to say, we dropped UHC. They are scum, pure and simple. Not sure what Cuomo’s can do for us as the right-wing AG in Virginia sure won’t do anything.

  47. MPHinPgh says:

    @SexCpotatoes: What? No lightening bolt up the ass for these guys?!?!?!?!

  48. Raku says:

    I used to work in a health insurance call center at my last job, first of all if you get you insurance at work 90% of the time its not insurance at, its just a health plan managed by the company, so if you are up set at what the coverage is and its self funded you can only blame the employer. My problem is you can never get a straight answer from a Drs office, heck half the time they don’t even know what they are going to charge me. So how can anything be reasonable and customary, they should make the Drs post their rate so that when a person has to pay they know what they are paying and when the rate are posted and don’t change 10 times in a day then there will a way to track reasonable and customary. Plus since when is an “simple” office visit $200, for less than five minutes of work that’s like $2400.00 an hour, sounds like both sides are wrong.

  49. MellowCat says:

    Having done insurance billing for a group of surgeons for years, I can attest to the illegal and unethical practices of UHC/Ingenix. The corruption I personally encountered between these two piece of scum companies would make the probe by Cuomo look minor; it runs so much deeper than this press release covers. I don’t think anybody would believe the stuff I witnessed. I am glad it is coming down on these criminals, but they will not get their just desserts. The corruption is too wide-spread WITHIN our government.

    A single-payer system is the way to go, and I am generally a Republican. Believe it or not, Medicare is the most efficient insurance “company” I ever encountered professionally. All of the private companies are wrought with waste and fraud that you and me are paying for anyway, as a de facto “tax.”

    I want to see UHC and Ingenix be the first to hang, followed by all of the other sleaze ball insurance mafias.