UnitedHealth Group $50 Million Settlement: Just the Tip of the Iceberg?

UnitedHealth Group, which provides health insurance coverage for an estimated 26 million Americans, has agreed to pay $50 million to settle accusations that the company intentionally overcharged millions of policy holders.

New York state officials, who announced the massive settlement on Jan. 13, 2009, vowed to expand their ongoing financial fraud investigation by looking into the billing policies of other large insurers.

UnitedHealth was accused of using a subsidiary firm to rig the system used to determine which medical procedures were necessary and how much physicians would be paid by the insurance company for patient visits. The result of the fraud was patients were denied coverage for some procedures, received less in reimbursements, and ended up paying more in premiums for going to the doctor.

While UnitedHealth claimed that it arrived at its reimbursement rates only after consulting “independent research from across the health care industry,” in reality, the company relied entirely on data created by Ingenix Inc., a data base company that UnitedHealth owned. Authorities alleged that UnitedHealth’s ownership of Ingenix constituted a conflict of interest.

For a hint at which companies may be facing closer scrutiny of their reimbursement billing practices in the wake of the UnitedHealth settlement, consider the list of other insurers that also use Ingenix data: Aetna, CIGNA, and WellPoint/Empire, and BlueCross/BlueShield.

More Investigations, Class Action Suit to Come?

New York Attorney General Andrew Cuomo said that in the wake of the HealthCare investigation and settlement, he is now looking into the billing practices of other insurance companies that use Ingenix’s database. In particular, Cuomo said the continuing investigation will look at industry methods used to determine reimbursement rates for patients.

In addition to the ongoing New York investigation, patients who were victims of higher premiums and denied medical procedures reportedly plan to join a massive class-action lawsuit seeking financial damages against UnitedHealth.

In an effort to prevent such billing fraud from occurring in the future, the money to be paid by UnitedHealth to settle the case will be used to create a new, nonprofit organization that will determine reimbursement rates for patients.

UnitedHealth Group Denies Fraud

UnitedHealth officials deny the accusations that they manipulated statistics in order to defraud consumers and refuse coverage for certain medical procedures. In a statement issued to media outlets, the group said: “We respectfully disagree with the New York Attorney General’s findings that we manipulated data … (or that our ownership of Ingenix was a conflict of interest.) We agreed to his settlement because it was an effective way to address any perceived conflict of interest.”

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