THE INSURERS AND HEALTH CARE

FYI: I have reprinted this press release.

Although this is directed at the Insurers practices against the physicians, they have used similar tactics against the hospitals while trying to have the institutions accept money losing contracts. In the late 80s & 90s the Blues would not sign a contract with Muhlenberg because the hospital refused their onerous terms. At the same time JFK accepted that contract. Even after the merger Blues' patients could not go to MRMC only to JFK in the area. They treated each hospital although both were part of Solaris as separate individual institutions.

During the ten years plus that I served as medical director for the Central Jersey Individual Practitioners' Association, a group of several hundred physicians practicing in western Union County and eastern Middlesex County, I had dealings with CoMed, Cigna, Aetna,NewYork Life and a few smaller vendors in constructing a contract that reimbursed the physician equitably. Even when a contract was in effect those companies would attempt to deny payment or unilaterally reduce the service value. At the same time they would attempt to break the IPA by enlisting physicians under capitation. If they felt strong enough they would suddenly terminate the contract or negotiations which the IPA was conducting without any hidden agenda.

The bottom line has always dominated these carriers actions at the expense of patient care. This also applied to hospitals and free standing surgical facilities. Often they would no permit (pay for) care at the best facility or by the best specialist.

Since I have retired there have been several judgements and fines against the Insurance companies for violating agreed procedures. They have risked them and payed them because they have gained dollars in the meantime. They continue to use financial blackmail against those who provide care. At the same time they will make rulings on treatments which are against the patients best interests.

Could these companies be violating anti-trust laws since they may be acting in collusion using an in house procedure developed by a third large commercial insurer.

MSNJ and the AMA File Complaints Against Aetna and Cigna Over Fees Based on the Ingenix Database

Yesterday, the Medical Society of New Jersey (MSNJ) and the American Medical Association (AMA) filed complaints in the US District Court District of New Jersey against Aetna Health, Inc. and the Cigna Corporation for systematically underpaying physicians who do not participate in their networks. The complaints are based on each company using unreliable data to determine payments of usual and customary fees for physician services. The physicians are seeking to prevent Aetna and Cigna from using their unreliable payment processes going forward and to recover reimbursements for physicians who have been underpaid.

In addition to MSNJ and the AMA, the legal action was joined by the Connecticut State Medical Society, the Medical Society of the State of New York, the North Carolina Medical Society, and the Texas Medical Association.

At the center of these complaints is the widespread use of the Ingenix database, owned by United Health Group (United), a large national health insurance company. The Ingenix databases and United were recently investigated by New York Attorney General Andrew Cuomo, resulting in a $50 million settlement. A separate class-action lawsuit subsequently settled for $350 million. United sold access to the Ingenix data to both Cigna and Aetna who in turn used the data to set fees for out-of network physician services. Aetna and Cigna process millions of transactions each year in New Jersey.

“These billing practices have proven unacceptable in the state of New York and they are unacceptable in the state of New Jersey, said Michael T. Kornett, chief executive officer of the Medical Society of New Jersey. This legal action seeks to prevent insurance companies from shifting the cost of out-of-network care to physicians and their patients,” Kornett added.

“We can no longer ignore the improper business practices of health insurers who decide to play by their own rules without regard to patients, or the legitimate costs required to care for them,” said AMA President Nancy H. Nielsen, M.D. “Through our lawsuits, the AMA and our partner medical societies seek to reform the payment systems used by Aetna and CIGNA by ending their dependence on the Ingenix database,” said Dr. Nielsen. “The lawsuits also seek relief for physicians who were seriously harmed by Aetna and CIGNA through the insurers’ long-term use of the flawed Ingenix database.”