updated 3/5/2009 3:19:59 PM ET 2009-03-05T20:19:59

Two upstate New York health insurance companies that serve more than 2 million people have agreed to stop using a faulty database that cost patients more when they used doctors outside of their plan's network.

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Albany-based Capital District Physicians' Health Plan and Rochester-based Excellus will stop processing claims through the Ingenix database, a flawed system used to calculate consumer reimbursements for treatment.

The move is part of an agreement with Attorney General Andrew Cuomo, who said that as a subsidiary of UnitedHealth Group Inc., Ingenix had an interest in helping set rates low so companies could underpay for out-of-network services. Doctors or other providers often billed patients for the difference.

"Consumers across the country will have greater transparency in understanding how much they may be reimbursed when they receive services from out-of-network providers," said Jim Redmond, an Excellus spokesman, in a written statement.

He said only a small percentage of the insurer's customers use out-of-network providers. The attorney general's office said 880,000 people in upstate New York had out-of-network plans through Excellus.

Excellus is the largest not-for-profit insurer in New York, serving nearly two million people.

"We will contact the 1,300 members who potentially may have been underpaid over the past six years as a result of the application of the Ingenix database," said Dr. John Bennett, president and CEO of the Capital District Physicians' Health Plan.

CDPHP has about 400,000 members in New York.

Thursday's settlements are the latest in a series between Cuomo's office and insurers that used Ingenix. The attorney general's office estimates that the reimbursements will cost the companies millions of dollars, once all calculations are complete and paid.

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