Managed-care company UnitedHealth Group said Thursday it will pay $350 million to settle a lawsuit over out-of-network medical claims. The deal comes two days after the insurer pledged $50 million to set up a new database to determine payments for those claims.
Another health insurer, Hartford, Conn.-based Aetna Inc., also agreed Thursday to pay $20 million toward the creation of that database.
Both the lawsuit settlement and the new database center on much-criticized databases operated by UnitedHealth subsidiary Ingenix Inc.
Insurers contribute claims information to the Ingenix databases, and then they use those numbers to determine their "usual and customary" payment rates for care patients seek outside their insurance network.
But the class-action lawsuit alleged that insurers lowered the data they contributed, which then helped them lower their payment obligations. Doctors or other providers often billed patients for the difference.
Plaintiffs in the case, which dates back to 2000, included the American Medical Association as well as patients and health care providers.
"This is a situation where there was a rigged scheme to shift costs that were promised to be paid by an insurer to the patients themselves," said Dr. Nancy Nielsen, medical association president.
A separate investigation by the New York Attorney General's Office found that insurers using Ingenix figures underpaid anywhere from 10 percent to 28 percent for certain out-of-network claims in New York state.
UnitedHealth said Tuesday it will close the databases and help fund the creation of a new one to be operated by a nonprofit organization. Aetna announced Thursday it will chip in, too.
A statement from the New York Attorney General's office said the two insurers — the second- and third-largest in the country based on enrollment — provide 70 percent of the billing information that makes up the Ingenix databases. Those figures will be sent, instead, to the new database.
Nielsen said the nonprofit will be a third party that has "no vested interest in cooking those numbers" to keep them low.
The new database, which could be running in six months, will include a Web site that allows patients to learn in advance how much they may be reimbursed for common out-of-network services in their area.
The trade association America's Health Insurance Plans has said this transparency could shed light on "one of the root causes" of rising medical costs: provider charges for out-of-network procedures that vary widely across the country.
New York Attorney General Andrew Cuomo said Thursday his office will continue to investigate the claims.
"There are many other companies that are doing this," he said. "It's not just United and Aetna."