The agreement completes sweeping reforms of the state’s health insurance industry’s payment system for out-of-network care.
The reforms stemmed from an investigation into Ingenix, a database that the insurers used to set rates. Ingenix reportedly manipulated rates, causing insurers to underpay patients who went out of network for health care.
HealthNet has agreed to end its relationship with Ingenix and will contribute $1.6 million to the creation of an independent database.
This is the twelth agreement the Attorney General has secured with health insurers, including the three largest insurers in the nation and the largest national and regional insurers operating in New York. To date, the office has secured nearly $100 million from insurers for the creation of the new database.
N.Y. Gov. David Paterson also issued a new Department of Insurance regulation which requires that health insurers and HMOs must use an independent source for establishing usual and customary rates for the reimbursement of out-of-network services.
To ensure fairness and accuracy industry-wide, the insurer must make certain that a “usual and customary” rate schedule fairly and accurately reflects market rates, including that it is:
• fairly and accurately reflects geographic differences in costs;
• based on sufficient data, to the extent available, to constitute a representative and statistically valid sample of charge data for the same or comparable service and type of provider;
• credible in methodology, data and relationships;
• includes input from a diverse group of relevant companies, groups, health care providers, and market researchers; and independent research conducted by the source of the data for the UCR schedule to confirm the accuracy of all data submitted; and
• updated periodically to reflect changes in health care provider charges, but no less frequently than once in any consecutive 12-month period.
Read the release on the New York out-of-network reforms.
