Good Morning.  Today’s hearing is the first of two hearings we are holding to look at a deceptive payment practice that the health insurance industry has gotten away with for the last decade, maybe even longer.

The victims of this deceptive practice were probably most of the people sitting in this hearing room today, along with the more than 100 million Americans who pay for health insurance coverage that allows them to go outside of their provider network for medical care.  

Having the ability to get health care services outside of their network is an important option for American consumers, and it’s an option they pay for – in the form of higher premiums, higher deductibles, and higher co-insurance payments.

We were scheduled to hear today from Dr. Mary Jerome, a resident of Yonkers, New York, who has been fighting ovarian cancer since 2006.  

Dr. Jerome was not feeling well enough to coming down to Washington today to testify, but she was kind enough to send us her testimony.  I ask unanimous consent to make her testimony part of the hearing record.  

According to her testimony,  Dr. Jerome received her health care coverage through a Point of Service plan, which encouraged her to get care within a provider network, but also allowed her to see out-of-network providers if necessary.  

Here’s what she says in her testimony:  “I had always been confident that paying for the out-of-network option provided peace of mind with respect to the financial burdens associated with catastrophic medical costs.”

After her cancer diagnosis, Dr. Jerome and her in-network primary care physician decided she needed to be treated by a health care provider that was outside of her network, the Memorial Sloan Kettering Cancer Center in New York City. 

Dr. Jerome knew she was going to have to pay some portion of these costs out of her own pocket, but she also assumed in good faith that the treatment was going to be covered by her insurance.

What we are going to learn today is that American consumers like Dr. Jerome – people who have been paying higher premiums for the choice to see out-of-network doctors - have not been getting what they paid for.  

We are going to hear testimony suggesting that the health insurance industry has been systematically lowballing American consumers. 

They have been promising to pay a certain share of consumers’ medical bills, but then they have been rigging health charge data to avoid paying their fair share.  

The result is that billions of dollars in health care costs have been unfairly shifted to Dr. Jerome and millions of other American consumers like her.

Here’s how it works: the insurance companies generally promise to reimburse out-of-network medical services at what they refer to in the industry as the “usual, customary, and reasonable” rate.  

Well, the problem is that it’s been the insurance industry who’s been deciding what “usual, customary, and reasonable” means.  Consumers haven’t had any input, doctors and other health care providers haven’t had any input.  Only the insurance companies have been getting to decide what’s reasonable. 

That’s like letting the fox define “usual, customary and reasonable” in the henhouse.

The good news is that thanks to a series of lawsuits and a year-long investigation by the New York Attorney General’s office, the insurance companies that operate in New York – including, most importantly, UnitedHealth Group and its medical information subsidiary, Ingenix - have been forced to change the way they do business. 

Our goal for today is to get an update on how the reforms proposed in New York are being implemented, and to understand how the deceptive practices uncovered in New York have been harming consumers in the other 49 states.

I am looking forward to this testimony, especially at a time when we are once again taking a good, hard look at our country’s health care system.

I would like to finally note that missing from our hearing today is one group of stakeholders who played an indispensable role in creating and perpetuating this unfair reimbursement system, but who will also play an essential role in changing it – the insurance industry. 

On March 9, 2009, I invited the CEOs of UnitedHealth Group and Ingenix to testify at this hearing today so we could hear their side of the story.  Because UnitedHealth told us that their CEO, Mr. Stephen Hemsley, was not available to testify today, we agreed to hold a second hearing next week. 

At 10 AM next Tuesday, March 31, 2009, we will be holding a hearing during which we hope to gain a better understanding of the insurers’ perspective.  

I now yield to the Ranking Member for her opening statement.  

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