UnitedHealth Group Settles Suit with NY State
In February of 2008, the New York State Attorney General, Andrew Cuomo, made a big splash by announcing that his office would investigate, and very possibly sue major health insurance carriers in the state over what were alleged to have been fraudulent billing practices.
“We believe there was an industrywide scheme perpetuated by some of the nation’s largest health insurers to deceive and defraud consumers,” Mr. Cuomo said at the time.
Well, lo and behold, one of the suits was settled today, by none other than UnitedHealth Group, the state's biggest insurer.
As part of the settlement with the state, the insurer admitted to no wrongdoing, however, it agreed to pay the state $50 million, which will ostensibly be used to set up a non-for profit independent billing company.
At the heart of the lawsuit were the billing practices of UnitedHealth and its competitors, who were accused of forcing patients to pay more for out-of-network care than the established market rates dictated.
How did these companies pull this off? UnitedHealth Group created a subsidiary, Ingenix Inc. which dictated the fees (co-payments, co-insurance, and such), that patients paid. But since Ingenix was in essence a part of UnitedHealth, there was an inherent conflict of interest, a conflict which, as the NY Attorney General proved, amounted to at least a $50 million fraud.
Score one for the good guys.
More on this story from MSNBC.
posted by KJ Wojciechowski at 2:09 PM
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