United HealthGroup and Aetna have agreed to pay millions of dollars to members who were scammed in what New York investigators called a "rigged" billing system.
United HealthGroup will pay $350 million, while Aetna will pay $20 million under an agreement with New York Attorney General Andrew Cuomo.
Ingenix, which is owned by United HealthGroup, operates the database that investigators say provided faulty data that led to overcharging consumers millions of dollars for using out-of-network doctors.
The settlements, announced on Thursday, follow an agreement with United HealthGroup announced earlier in the week by Cuomo. The insurer agreed to pay $50 million to create a nonprofit, independent database system. The $20 million settlement with Aetna has similar stipulations.
Ingenix provided lower reimbursement figures than what the patients paid, making it possible for insurers to make smaller payments, according to investigators.
"We will not stop until the entire industry has been reformed," Cuomo said. "We are aggressively pursuing the other health insurance companies."
Cuomo charged that Ingenix, a subsidiary of United HealthGroup, served as a conduit for rigged data to the largest insurers in the country, including United HealthGroup, Aetna, CIGNA, Wellpoint and Empire Blue Cross Blue Shield.
The American Medical Association has called on all health insurers to immediately reject the flawed Ingenix database.
"The Ingenix database has corrupted the system for paying out-of-network medical bills, resulting in patients and physicians being cheated by health insurers," the AMA said in a statement issued Thursday."A lack of transparency, accuracy and integrity in the payment system has allowed insurers to place profits ahead of their promises to patients."
"By using a flawed database to determine reimbursement rates for out-of-network care, insurers have increased profits at the expense of patients and physicians," said AMA President Nancy H. Nielsen, MD.
"It was a blatant fraud," Cuomo said. "It was an obvious fraud."
The $350 million to be paid by UnitedHealth, the second-biggest insurer in the country, is "the largest settlement by a health insurance to date," Cuomo said.
At a press conference called by Cuomo on Thursday, Mitch Zamoff, general counsel for United HealthGroup, said, "We view this as a positive event for United Healthcare and the healthcare system. We regret that conflicts of interest were inherent in the Ingenix database."