Member Seeks Class-Action Status in Suit Over Health Insurers’ Reimbursements

A health plan member is seeking class-action status for a lawsuit against UnitedHealth Group's Ingenix unit and several health insurers, alleging they conspired to fix reimbursement rates for out-of-network services.

Jeffrey M. Weintraub, a member of an Aetna health plan, seeks to represent a class of anyone who paid premiums for out-of-network health insurance coverage from the defendants and received reimbursement for out-of-network medical services that was based on the rate provided by Ingenix from Jan. 1, 2004, forward.

Other defendants in the suit, filed in Connecticut federal district court, are UnitedHealth (NYSE: UNH); Oxford Health Plans, a unit of UnitedHealth; Aetna Inc. (NYSE: AET); Cigna Corp. (NYSE: CI); Empire Blue Cross Blue Shield, a unit of WellPoint Inc. (NYSE: WLP); Health Net Inc. (NYSE: HNT); Humana Inc. (NYSE: HUM); Group Health Insurance and Health Insurance Plan of Greater New York.

In February, New York Attorney General Andrew Cuomo said he would sue Ingenix, a provider of health-billing information, UnitedHealth and three subsidiaries as part of an industrywide investigation into a "scheme by insurers to rip off consumers" by manipulating reimbursement rates when they use providers outside their insurer's networks (BestWire, Feb. 14, 2008). Ingenix functions as a conduit for rigged data to the industry, he alleged. No suit by Cuomo has been filed.

According to the Connecticut class action, to calculate their reimbursement rates for out-of-network services, the defendants use a database created by Ingenix to determine their reasonable and customary rates. Members pay a higher premium to use out-of-network doctors and in return, the health plans cover up to 80% of either the doctor's full bill or of the usual rate, depending on which is cheaper, the suit says. The attorney general's investigation showed these rates were "remarkably lower" than the actual costs of typical medical expenses, the suit said.

The defendants allegedly were able to keep reimbursements "artificially low," resulting in higher out-of-pocket costs for patients.

UnitedHealth said the company can't comment because the case is in litigation. Fred Laberge, a spokesman for Aetna, said the company is reviewing the complaint, "which is very similar to others filed against Aetna and other health plans in the recent past." Both Aetna and Empire said the allegations are "without merit" and the plans intend to "defend this case vigorously." The other companies didn't immediately provide comment.

As part of Cuomo's probe, launched in February, he issued subpoenas to the Aetna, Cigna, Empire, Humana, Health Net and other insurers (BestWire, Feb. 21, 2008). About a month later, he issued new round of subpoenas to at least eight insurers (BestWire, March 7, 2008).

(By Fran Matso Lysiak, senior associate editor, BestWeek: [email protected])