Florida Investigating Use of Health Insurance Databases Linked to Fraud

Florida insurance regulators are investigating health insurers' use of scandal-tarred databases used in billing for out-of-network medical care.

In a letter to Florida Insurance Consumer Advocate Sean Shaw, Insurance Commissioner Kevin McCarty said his department is investigating the use of databases provided by health information company Ingenix Inc., a subsidiary of UnitedHealth Group (NYSE: UNH). The letter did not elaborate. Office of Insurance Regulation spokesman Tom Zutell declined to comment on the investigation.

Ingenix databases ? used by many U.S. health insurers ? have been the subject of lawsuits and investigations by other state regulators.

In January, Minneapolis-based UnitedHealth said it would pay $350 million to settle class-action lawsuits over reimbursements for out-of-network services filed by the American Medical Association, state medical societies, health care providers and health plan members (BestWire, Jan. 15, 2009).

UnitedHealth also reached a national settlement with New York Attorney General Andrew Cuomo, who alleged a health-billing database run by Ingenix cheated consumers by manipulating reimbursement rates when they used health care providers outside their insurer's networks (BestWire, Jan. 13, 2009). That settlement, filed in federal court, included an agreement to close two Ingenix databases and pay $50 million to a nonprofit organization, which will establish a new, independent database.

The U.S. Senate Commerce Committee conducted a March hearing into how insurers calculate "usual and customary" reimbursement rates for out-of-network care.

While the controversy is national in scope, Shaw said he wants to know to what extent, if any, Florida consumers have been overcharged. "A lot of good can come out of this. We'll see what the investigation determines," he said.

In June, Health Net Inc. (NYSE: HNT) agreed to stop using Ingenix reimbursement databases and to pay $1.6 million toward the database fund under an agreement with the New York attorney general. In all, New York received $100 million from 12 health insurers for the database in what Cuomo called a "corrupt reimbursement system" (BestWire, June 19, 2009).

A UnitedHealth spokeswoman did not immediately respond to messages seeking comment.

In early afternoon trading on Aug. 5, UnitedHealth Group stock was trading at $26.31 a share, down 2.3% from the previous close.