Two-Thirds Of Insurers Share Faulty Database That Lets Them Overcharge Patients
Earlier this week, a Congressional investigation revealed that several insurance companies rely on a database from Ingenix that deliberately underestimates the cost of medical services, reports the Associated Press. The result is that "American consumers have paid billions of dollars for health care services that their insurance companies should have paid."
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.
[...]
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.
Ingenix is owned by UnitedHealth Group, which the Associated Press says has admitted no wrongdoing but has agreed to close the database and fund a new one.
"Senator: Use of faulty insurance data 'pervasive'" [Associated Press]
(Photo: Subconsci Productions)
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Comments:
But we have the best healthcare system in the world!
/sarcasm
Wow, what a surprise! A public system would at least have a *modicum* of integrity.
This is so full of LOL I almost cried. One of the largest insurers runs a database that just happens to be full of errors that benefit their bottom line. Hmmm.
Would you like the one, two, or three year extended warranty with that healthcare?
This is old news. The problems with the Ingenix database were revealed when Cuomo sued, back in 2008. A settlement was announced months ago, in January (see e.g. [www.modernhealthcare.com]). Why is this being presented as new information? It's not.
Holy conflict of interest.
Hearing stuff like this, while not surprising, makes me furious seeing as I shell out $3-4 grand+ a year to UHC for my wife's cancer care.
@PsiCop: Because it was not widely covered at the time except in the business and specialty (e.g. Modern Health Care) press. Given the public debate about health care taking place now, it is important to get this kind of information to the general public so that they can adequately evaluate the coming tsunami of special interest propaganda.
@computerwiz3491:
We have the most effective and most responsive healthcare in the world. If you NEED care, you can get it. You just can't afford it.
Our insurer is currently insisting our son wasn't added within the 31 day window. My husband's employer submitted the paperwork 14 days after he was born. (And has proof, luckily.) The insurer's all, "Oh, we fixed it, he's on there now." We go to fill a prescription and, surprise surprise, they still haven't put him on. And they're all, "Oh, but you didn't add him within the 31-day window." It's like a mobius strip of excuses and fake resolutions!
How convenient that they "lost the paperwork" in a way that brings them maximum financial benefit.
@jmujeff: What do you think cancer care should cost? Nothing? Is she not getting a service in exchange for your money? $3-4k to treat a life threatening disease seems like a bargain.
Remove the incentive to profit off of medical breakthroughs and you remove new breakthroughs.
Bear shits in woods, more at 10.
@Eyebrows McGee (now with more baby!): I feel your pain. If anything, the insurance companies need to have some kind of financial penalty for making the same mistakes over and over again, or reimburse the insured for costs to fix the company's mistakes.
I had one insurance company (named in the post above) drop me twice on COBRA claiming non-payment when they had cashed my checks. On time. And both times it took escalation via the appeals process to fix.
Considering that we're entering the beginnings of how to fix our wildly expensive, under-producing health care system, this article is much appreciated.
I'd also add that if someone tried to steal 1/10,000th of the amount pilfered by our beneficent health insurance providers at a 7-11 using a pretend gun, the miscreant would be jailed for a decade. Yet these guys get phat bonus checks.
Nothing to see, move along, we've got the BEST health care system in the world!
@Eyebrows McGee (now with more baby!): A while back, when I around 9 years old, my parents dental insurance kept insisting that my brothers and I weren't really dependents. My parents would argue, they would "fix" it, but still didn't pay.
Just goes to show we need to scrap this whole medical insurance nonsense and get down to brass tacks. Having a middleman who's sole purpose is to make money off of people's medical problems and has a HIGH incentive not to pay claims is simply self-defeating.
@JeffIowa:
It's only responsive and effective if you can pay for it. If you aren't covered (which a LOT of people aren't), you go to the "free" system.
And it gets worse every year, even if you do have insurance, there are no guarantees they will cover anything, anymore.
@Scuba Steve: Not all doctors and medical researchers go into medicine because they have huge hearts and want to save people. Many go into medicine because there is good money in medicine.
My neighbors growing up were some of the nastiest people on the block but were brilliant medical researchers. They certainly didn't choose that field because they were humanitarians. No, they enjoyed the country club lifestyle their profession provided. Remove the incentive to have a high paying career and you'll lose those minds to other technical fields.
I'm not saying our current system is optimized, but there are serious unintended consequences, especially on the technical side, with removing profits from medicine.
@lannister80:
Like Soviet Russia! Oh, wait....
(Not actually opposed to public health care, socialism, et al.)
@Saboth: I agree, except who will then protect us from being overcharged by the providers? Believe me, many doctors are as greedy as the next guy. I don't think I should get care for free-but I think it should be a reasonable cost. Doctors have many costs- malpractice insurance, student loans, practice costs- but a large part is their enormous cost of self entitlement.
Is this grounds for the class action suit of all time, or am I missing something?
Can't even begin to estimate the time and effort I've had to put in dealing with this kind of insurance company BS, plus the stress, and the rage with no place to go.
And who's going to verify that they fix their database and keep it fixed - themselves?
@ThinkerTDM: Doctor's "need" to make a lot of money because they paid hundreds of thousands of dollars for medical school and have huge loans (we're talking $200k+ at times). Not an excuse, but an explanation as to why doctors, even the ones who got in the medicine for the right reasons, need think too much about bottom line.
@ThinkerTDM: But the insurers aren't protecting us now. How would being gouged by doctors be different than being gouged (or having claims denied) by insurance companies?
@bearymore: Don't get me wrong, I don't object to people knowing about the Ingenix scam. It's just that it's not new ... especially to the movers & shakers now trying to decide the future of healthcare. They knew about it long ago.
And it was covered in the usual press outlets that I read, e.g. my home state's paper of record, the Hartford Courant. But the article that had been there, is no longer available. The NY Times also reported on it, i recall, but I didn't search their archives, I just used Google News. Just for the record, here's a January story from the NY Times: ([www.nytimes.com]).
I guess I'm asking why suddenly this is being presented as some kind of "shocking new revelation." It really is not. Those who've worked in health care have known about this for a while now.
You would be correct except money Insurance companies make don't go to hospitals and laboratories, they go to pay bonuses and dividends.
@Shoelace: It is fodder for a class action, to be sure ... but there is a blizzard of lawsuits underway already. Some have targeted United Healthcare (which owns Ingenix) directly (that would be AG Cuomo, as well as some other government agencies), others have been indirect, e.g. Aetna and Cigna were sued because it used the data, even though it did not generate it (see e.g. [www.nytimes.com]).
I suspect any class action that gets filed, would somehow end up being rolled into one of the suits that's already underway, or else, it will get delayed until those are resolved first.
@Trai_Dep: to build on that statement, if the number of people who died because of lack of health care coverage were instead killed in a war, and we knew that war would cost a trillion dollars to fight, you bet your ass we would still go in there and rescue those people. But, sadly, that war is not on the nightly news, and people still think that saving our own people is somehow socialism.
@JeffIowa: We're roughly fortieth both in longevity and in preventing infant mortality. So not really in the running for most effective.
@computerwiz3491: When my sister was diagnosed with a rare form of arthritis at 16, my parents' insurance company tried to claim it was a pre-existing condition and they didn't have to pay. My dad had to put on his lawyer pants and point out to them that she'd never pre-existed the policy as she'd been on the same one since she was born, and my parents both on the policy for a good ten years before that, so EVEN AS A BLASTOCYST SHE WAS ALREADY ON THE POLICY.
God insurance companies suck.
@HIV 2 Elway: The actual issue at question here is this: Is she being overcharged for that service based on a corrupt and error-ridden system?
@HIV 2 Elway: Singapore. Public healthcare system. One of the best in the world. One of the world leaders in stem cell research. End of discussion.
@Eyebrows McGee (now with more baby!): Holy cow.
Shakespeare had it wrong about lawyers being first - if he were around today, it'd be infant-threatening insurance employees.
Hope you get all lawyerly on them and bury them under paper, once your son's rightly covered. Make it a hobby. Call your attorney friends and, like a knitting circle, take turns plastering them with suits.
Glad your employer has the paperwork to back you up, btw. Can't imagine how a civilian would have the wherewithal to combat this.
@computerwiz3491: I'd amend this.
If you NEED preventative care, but can't afford it, you can't get it.
If you NEED immediate care, but can't afford it, you get it, but then you go bankrupt.
If you NEED care and can afford it, congrats! You don't have to pay for it.
@Trai_Dep: Now that we know the employer has proof, I'm not actually that fussed about it and will wait for my husband's employer to handle it, because ...
They're a litigation firm. That does lots and lots and lots of insurance litigation.
@PsiCop: As bearymore stated, for those of us who *don't* work in health care, this is news. They never claimed it was *breaking news*, simply that it was news. And I, for one, am glad to read about it. It just confirms another "insurance companies suck" point for me.
@Eyebrows McGee (now with more baby!): Remember a few posts back, where I said that my insurance company wasn't going to pay for my baby's birth? Yeah, still fighting that and the kid hasn't even been BORN yet. I started talking to them the moment I knew I was pregnant, I'm in my second trimester, and we *still* haven't gotten sorted out what they're going to cover and what they won't. (I think my insistence on getting what they're going to cover in writing ahead of time is freaking them out.)
@JeffMc: True. And at least with doctors you're practically guaranteed care! About five years ago insurance company refused to pay somewhere around $3,000 in medical expenses that they'd previously promised to pay for - Xrays, exams, ect. After a year of going round and round with them I finally just called up my doctor's office and started a payment plan. I had them paid off in two years and they were never nasty about it if I had to miss a payment so long as I called and gave them a head's up.
@Kd McEntire: Just for the record, that was Blue Cross, Blue Shield, Kansas City. I *refuse* to even consider going with BCBS now.
@HIV 2 Elway: Congratulations on your city wasting a bunch of money on superfluous MRI scanners that could have gone towards, you know, actual medical care.
@Kd McEntire:
Greedy Docs? I certainly am not in this field for the money, but I'd be lying if it wasnt an incentive. Why should every other field be allowed to set their own prices for their services and let the market bear it out but medicine? Its ridiculous! These companies are going to get a slap on the wrist for bilking people out of billions, but doctors are going to have to give up a substantial portion of their income? I say if we have to take pay cuts, so should every damn person around here from the lawyers to the CEOs. Let the govt. fund my house, then I'll sign on to Obamacare.
And this will only go on to serve the purposes of a nationalized healthcare system which will do absolutely squat to fix the underlying problem, which is:
The cost of medical care in this country is unsustainable and out of control.
There are so many root causes to the cost of care in this country but instead of tightening the screws, our benevolent overlords are looking to use gold-plated nails and a sledgehammer.
Or in lots of other cases (GOP leadership, I'm looking at you) the solution is that there is no solution. We're just fine and dandy!
Sky blue, water wet.
HMO's and Insurers are in the business of making money, the fact that you've been cured or healed by one of these companies is an unintended consequence.