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Ingenix’s Lack of Independence Cited
[By Dr. David Edward Marcinko; MBA]
According to Melissa Dahl, Jeff Rossen and Robert Powell of msnbc.com on Jan. 13th, 2009, UnitedHealth Group agreed to pay $50 million in a settlement after being accused of over charging millions of Americans for health care.
The Investigation
An investigation was launched after receiving hundreds of complaints about Oxford Insurance and its parent company, which claims to rely on “independent research from across the health care industry” to determine reimbursement rates.
Faux Independence
In actuality though, it relies on the well known firm, Ingenix, a research arm owned by UnitedHealth Group. The allegations are that Ingenix has been manipulating the numbers so insurance companies pay less.
Other Insurers under Investigation
Although UnitedHealth Group and Oxford Insurance were the only entities investigated, other major insurers use Ingenix, including Aetna, CIGNA and WellPoint/Empire BlueCross BlueShield.
CEO Bill McGuire
The $50 million UnitedHealth Group will pay as the settlement will be used to create a nonprofit organization that will determine reimbursement rates for patients. William W. McGuire MD was the CEO of United from 1992 until his ignominious resignation in 2006, because of his involvement in an employee stock options scandal. Hence, rise of the insider moniker; “Useless Healthcare.”
Assessment
According to blogger Robert Laszewski,
“The big losers here are the docs. The result is going to be about the same and their medical societies will now have less reason to challenge the customary and reasonable system than they did before.”
As a medical practitioner, I eschewed contracts with this company a decade ago. Relative to peers, I was never so happy! Some companies just can’t seem to learn, or change their culture. But, the more important question to ask: is this indicative of an isolated rogue company, or the entire health insurance industry?
Conclusion
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Filed under: Health Economics, Health Insurance, Managed Care, Op-Editorials, Practice Management, Research & Development, Risk Management | Tagged: Aetna, Bill McGuire, Cigna, Ingenix, UnitedHealth Group, WellPoint/Empire BlueCross BlueShield |
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On UHG,
According to Brian Orelli of the Motley Fool, on January 22, 2009, there is little doubt that UnitedHealth Group is pleased to have 2008 behind them.
Rising health-care costs and a higher unemployment rate – and therefore more uninsured people – is a bad combination for health insurers.
The company finished the year with another quarter of sinking earnings which fell 15% per share, after adjusting for the previously an-announced charges. This brought the adjusted net earnings for the year to $2.95. Compare that to the $3.95 to $4.00 per share that the company was predicting it would earn this time last year and you can see just how bad a year it was.
Revenue in the fourth quarter was actually up 9%, but unfortunately the company’s costs rose even faster. The medical care ratio – medical costs divided by premiums – jumped to 80.8% in the fourth quarter from 79.9% last year. But that’s still an improvement compared to earlier in the year when the medical ratio was increasing at alarming rates.
And so, is UHG rapidly becoming the company which patients, hospitals, medical providers and all stakeholders “love to hate?” Is it symptomatic of what’s wrong with health insurers?
Or, is it a righteous firm in a bad, but temporary, situation?
-Alan
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More On Tom Daschle and UHCG,
It has come to light that another healthcare client paying for HHS secretary elect Tom Daschle’s policy advice was UnitedHealth, the giant insurance company with many issues pending before the Department of Health and Human Services.
In fact, about a third of its $81 billion in revenue last year came from federally regulated sales of Medicare Advantage and Medicare supplement and prescription drug plans. The company even boasted in its annual report that “one in five Medicare recipients participates in a UnitedHealth Group Medicare program.”
-Acre Stansky
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Hi Acre,
It seems like it never ends with UHC.
Evercare, UHC’s contracted services firm for down here in the State of Texas, was fined one million dollars last year, ordered to increase staff, and improve its operations for the program that is mean to coordinate for the elderly, blind and disabled.
Mindy
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Mindy, Acre and all ME-P Subscribers,
When do you think that UCH and its subsidiaries including Ingenix, will be shut down? Please opine.
Dr. Marcinko
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Ingenix – it’s Outa There
Mindy, according to Dan Bowman, of Fierce HealthFinance on February 18, 2009, Andrew Cuomo the New York Attorney General reported that UHG has agreed to shut down its’ Ingenix database. Cuomo waged a similar battle with Aetna in which the insurance group agreed to pay more than $5 million because it initially underpaid patients’ out-of-network costs.
Up until now, Cigna has also used Ingenix, the controversial database owned by UHG to determine out how much patients owe in reimbursement fees when they see doctors outside of their insurance network. Conflicts have led to many patients overpaying, according to The Washington Post, thus the need to reform. Cigna apparently will use $10 million of the company’s own money to create a new, independent database.
Now, I hope this includes the UCH and Ingenix, CPT® code related publishing subsidiaries, as well. UHG should be outa-there, too. What mess!
Dr. John Williams
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A measure of effectiveness
Know how I discovered that today’s criticism of CIGNA’s doctor-rating system has already been viewed by a significant number of people?
Dr. David Edward Marcinko’s 2009 article, “UnitedHealth Group Shenanigans,” which I shared a link to in the article, has suddenly appeared as number 9 on the Medical Executive-Post’s top ten most popular posts.
I’d say my efforts to bring transparency to dentistry are apparently far more effective than CIGNA wants to admit. What do you think?
D. Kellus Pruitt DDS
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