What Lawyers Do

The New York Attorney General has entered into a settlement with UnitedHealth Group , the largest insurer in New York, concerning the method it used to calculate reimbursement for out-of-network services.

When an insured goes out of network, he receives a bill from the provider and the insurer customarily pays a percentage, say 70 or 80%, of what it has determined to be a usual and customary rate (UCR) for the service. 

In determining the UCR, United Health relied on data provided by a company named Ingenix that it owned and controlled. The result was that it determined low UCR’s and insureds were routinely had to pay a larger share of their medical expenses than they should have.

Under the settlement, United Health will pay $50 million to finance the creation of a new database. It will not have to reimburse its insureds but there is a class action pending.

The New York Times reports:

Mary Jerome, a professor at Columbia who was found to have ovarian cancer in 2006, said she had been left with unreimbursed medical bills amounting to tens thousands of dollars. Her complaints to the attorney general’s office helped spur the investigation.

Ms. Jerome, who said she had been treated at Memorial Sloan Kettering, in large part because her primary care physician recommended the hospital, expected she would have to pay no more than her $3,000 deductible for going out of network. But she said she had soon been swamped with bills that left her $70,000 to $80,000 in debt.

She found herself trying to decipher bills with more than 200 line items.

“You’re lying there in a morphine grip with someone draining your lungs, trying to figure this out, and you just cannot,” she said. “It cannot be done.”

Sick people poring over indecipherable medical bills… universal healthcare, anyone?