The AMA, the Medical Society of the State of New York, the Missouri State Medical Association, individual physicians and subscribers/beneficiaries are named plaintiffs; several unions of New York State employees have also joined the case as additional plaintiffs. American Medical Association et al. v. United Healthcare Corporation et al. alleges that UHC subsidiary Ingenix has developed a database to determine UCR and frequently uses unreliable or insufficient data to make that determination. The plaintiffs assert that the UCR are substantially higher than the insurance companies allow. The principal claim is that UHC’s practices in determining UCR rates, including its alleged reliance on the Prevailing Healthcare Charges System(PHCS) database, violate ERISA and RICO, the terms of the employer plans themselves and, in the case of certain plaintiffs, New York’s Deceptive Trade Practices statute and contract law, say court documents.
The suit’s request for an injunction that would bar UHC from continuing to use these practices has been denied by the U.S. District Court for the Southern District of New York; however the plaintiffs are allowed to continue with RICO claims and are further permitted provide the court with “both factual allegations showing frustration of contractual rights to remedy, and a clearly defined damages amount, within 30 days of completion of substantive discovery” in order to continue the RICO claims. BNA has a PDF of the U.S. District Court’s ruling.
On Feb. 13, the New York Attorney General’s Office announced it had commenced a broad investigation into the use by insurers of defective databases and that it intended to bring suit against UHC related to defects in its Ingenix database. That investigation is ongoing and may result in investigations by regulators in other states. Separately, Health Net agreed over the summer to pay $255 million to settle out-of-network underpayment allegations; its underpayments resulted from the use of a flawed Ingenix database.
