It took him a few more months than expected, but New York Attorney General Andrew Cuomo has introduced a not-for-profit group called Fair Health that is intended to provide insurers with an accurate account of what they owe for out-of-network services. And he is promising that the new operation will have a Web site that will give people an easy way to compare what doctors charge and what the member share is.

Amid considerable fanfare, Cuomo reaped hundreds of millions of dollars from quite a few insurers after accusing them of defrauding patients for years by relying on artificially manipulated data from Ingenix, a subsidiary of UnitedHealth Group. According to Cuomo, Ingenix provided insurers with artificially low averages for what physicians charge for a service, leaving consumers on the hook for a much larger share of their doctor’s actual bill than they should have paid.

It worked something like this: When a patient went to a doctor in New York, he might get a bill for $185. But using data from Ingenix, the insurer would estimate the average bill for that service in that part of the country to be $110, and would reimburse the consumer, say, 70 percent of the $110 — $77. The patient would pay $108, rather than $55.50.

Setting up shop at Syracuse University, a group of New York State community colleges will be charged with tracking regional data on a national basis and launching a consumer Web site within a year. Also, there’s no specific methodology in place yet; that has to be worked out.

Cuomo’s crusade was hailed by reform advocates such as Nancy-Ann DeParle, director of the White House Office of Health Reform, who saw it as a victory for consumers waging a lonely struggle against managed care companies.

“This is an important step forward for consumers, who too often are unable to penetrate the secrecy and bureaucracy of insurance companies,” she said.

But not everyone is sure there is a clear winner or loser.

“It could be much ado about nothing,” says Ed Kaplan, the national health practice leader at the Segal Company, a benefits and human resources consultancy.

Segal routinely bought Ingenix’s data and audited the numbers for the self-insured employers that it works for. And every year, the broad numbers advanced right alongside the actual cost trends — the same sort the Syracuse group will track — that Kaplan was seeing.

For now, no one really knows what it means, he adds, because the new not-for-profit organization doesn’t know what methodology it will use to calculate “reasonable and customary” charges.

“If the AMA has too much influence,” he adds, “it could be very inflationary.” In one instance he cited, pediatric orthopedists in New York were charging $500 for examining a broken finger, a 10-minute procedure. Insurers would negotiate that down to $150 or $200. Will the new not-for-profit use those numbers — which average out at $3,000 an hour — in its calculations?

Big insurers long ago reconciled themselves to a change in the payment system.

And some of them quickly cheered Cuomo’s announcement as a positive step in the long march toward greater transparency on the true cost of health care.

“True transparency, though, requires not only information about what plans pay, but also what physicians charge for their services,” responded the New York Health Plan Association in a statement. “Patients have an equal right and need to the information about what doctors charge in order to accurately calculate what their insurance will pay and what their out-of-pocket responsibility will be. We hope Fair Health will provide both these vital data.”

UnitedHealth has already agreed to get Ingenix out of the business of calculating reasonable and customary charges as part of its settlement with Cuomo.

“We stand ready to work with Fair Health, Syracuse University, and the research consortium on an expeditious transition of the database,” the company said in a prepared statement.

Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, said that ultimately, it is the doctors who may be in for a rude awakening.

“We hope this database will help shed light on the exorbitant fees that some out-of-network providers are charging patients for health care services,” he told the New York Times.

Andrew Cuomo has followed through with a plan to replace Ingenix with a not-for-profit group to provide more accurate reports of “reasonable and customary” physician charges.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.