WASHINGTON, D.C. – The Senate Committee on Commerce, Science, and Transportation held the second of two full committee hearings on Deceptive Health Insurance Industry Practices – Are Consumers Getting What They Paid For?  These hearings focused on the way that the healthcare industry calculates “usual and customary” reimbursement rates for consumers who choose to receive care from out-of-network doctors and other healthcare providers.

Newly Released Information:
 
Chairman John D. (Jay) Rockefeller IV sent this letter today to the Inspector General of the Office of Personnel and Management asking him to investigate how many federal workers’ out-of-network reimbursements may have been reduced by the use of the Ingenix databases. 

Closing Remarks – John D. (Jay) Rockefeller IV, Chairman:

“Before we close this hearing I would like to review what we know and what we don’t know about how the insurance industry reimburses American consumers for out-of-network services.

First of all, we know that for a long time, alert doctors and consumers knew that something was wrong about the way the industry was calculating “usual and customary” medical costs.  But they didn’t have the resources to find out what was really going on.  As Ms. Lacewell from the New York Attorney General’s office described it last week, the insurance industry’s practices were hidden in a “black box.”

It took the combined efforts of the AMA, various consumers’ groups, and the New York Attorney General’s office to open this box.  What they found was what people had suspected all along - that consumers were being reimbursed at rates that were significantly below the prevailing rates.    

Armed with this information, the New York Attorney General was able to force insurance companies operating in New York to change their practices.  Because many of the country’s largest insurance companies – including UnitedHealth, CIGNA, Aetna, and Wellpoint - do business in New York, Attorney General Cuomo’s work had a national scope. 

But there are still a number of questions that have not been answered.  For example, there are hundreds of thousands of federal workers who have health insurance coverage with an out-of-network option.  

I will be sending a letter today to the Inspector General of the Office of Personnel and Management asking him to investigate how many federal workers’ out-of-network reimbursements may have been reduced by the use of the Ingenix databases. 

Another thing we don’t know is how widely the Ingenix databases were used by insurance companies that do not operate in New York.  According to our review, Attorney General Cuomo’s settlements have forced seven out of the top 25 health insurance companies to change their practices. 

Over the next few days, the Committee will be sending letters to the rest of the top 25 companies asking them if they used the Ingenix data to determine reimbursement rates.  These letters will also ask these companies if they intend to change their practices in light of the Attorney General’s investigation. 

We are continuing this investigation because American consumers deserve to know what they’re getting when they pay their health insurance premiums.  They’ve been in the dark for too long.”

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