New York Attorney General Andrew Cuomo reached a settlement with UnitedHealth Group (UHG) last week, requiring the insurer to pay $50 million to finance the creation of a new database to be used to determine the "usual, reasonable and customary (UCR)" charges for medical care. The American Medical Association (AMA) held multiple meetings and phone calls with Attorney General Cuomo and his staff last year, alerting them to the inherent conflict of interest of UHG-owned Ingenix creating the industry-wide databases that most health insurers currently use to set reimbursement rates for services provided by out-of-network physicians and other health care providers.
Attorney General Cuomo found that UHG understated the true market rates of medical care by up to 28 percent and that, as a result, patients were forced to pay a higher portion of their medical bills than they should have paid. The agreement requires that the new database be run by a nonprofit, likely a university, although that designation has yet to be announced. Attorney General Cuomo also reached a similar agreement with Aetna this week. Aetna will pay $20 million to finance the new independent database and associated efforts to replace the current biased process.