NY AG: New Not-For-Profit Co To Develop Health Insur Database
By Chad Bray, Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- New York Attorney General Andrew Cuomo on Tuesday
announced the creation of a new not-for-profit company to help establish an
independent database to help determine the rates that health insurers pay
doctors and hospitals out of their networks.
The company, to be called Fair Health Inc., is an outgrowth of Cuomo's probe
into a controversial database that was maintained by UnitedHealth Group Inc.'s (
UNH) Ingenix unit and used by the industry to determine the "usual and
customary" rates for medical procedures in an area.
Fair Health will work with a group of upstate New York research universities
and will use nearly $100 million in settlement moneys to develop the new
database, Cuomo said. The schools are Syracuse University, the State University
of New York at Buffalo, Cornell University, the University of Rochester and SUNY
Upstate Medical University.
The company also will maintain a Web site that allows consumers to check out-
of-network reimbursement rates for potential procedures, Cuomo said.
"When you go to the doctor's office, there will be no surprises," Cuomo said.
Creation of the not-for-profit company was unveiled at a press conference at
Syracuse University Tuesday.
Research for the new database will be centered at Syracuse University's
Maxwell School and its School of Information Studies, Cuomo said.
The attorney general had alleged that the Ingenix database skewed the "usual
and customary" rates in an area downward through faulty data collection, poor
pooling procedures and lack of audits, thus forcing consumers to pay more out of
their own pockets for health care.
In January, UnitedHealth agreed in a pact with Cuomo's office to shut down the
Ingenix database and pay $50 million to establish a nonprofit group to run the
new database.
Cuomo has reached agreements with health insurers who serve New York state to
provide about $100 million to establish a nonprofit group to run the database,
including WellPoint Inc. (WLP), Aetna Inc. (AET) and Cigna Corp. (CI).
Last year, Cuomo threatened to sue UnitedHealth over the database and issued
subpoenas to a number of health-insurance companies that use it, including
Aetna, Cigna and WellPoint's Empire Blue Cross Blue Shield.
-By Chad Bray, Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com
(END) Dow Jones Newswires
10-27-091118ET
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