Cuomo Versus Big Insurance

Andrew Cuomo announced a $50 million settlement with United Health Group, a major insurance company, that he said will lead to lower health insurance costs and more transparency about how much patients can expect to pay for medical procedures before being billed.

In a crowded press conference at St. Vincent’s Hospital on West 12th Street, Cuomo said the rates by which insurance companies agree to reimburse patience for procedures conducted by doctors not covered by their policy amounted to defrauding customers.

Cuomo said major health insurance companies were basing their reimbursements rates on the average cost of medical procedures, as determined by one company, Ingenix, which was calculating its figures based on information provided by those insurance companies.

Cuomo described it as a “black box,” and a “closed system riddled with conflicts of interest.”

For example, a customer’s policy stated that an insurance company would cover 80 percent of the “usual and customary rate” an operation, customers were never told what the insurance company considered a “usual and customary rate” for the operation.

The result is doctors billing patients for more money that insurance companies would cover, leaving patients to pay a larger difference than expected.

United Health agreed to dissolve Igenix and help create a new, non-profit entity to do similar work. Cuomo also said this new entity will launch a web site to make public the costs of medical procedures, giving patients information before going to doctors, undergoing treatment and getting billed.

Cuomo said he hoped to announce more settlements with other insurance companies shortly.

Cuomo Versus Big Insurance