First Upstate New York health insurer joins attorney general's healthcare reform

Nick Rees Feb. 5, 2009, 11:46am

Andrew Cuomo (D)

NEW YORK (Legal Newsline) - New York's attorney general has announced an agreement that brings his nationwide health care reimbursement system to Upstate New York and filed five-day notice to file suit against another Upstate health insurer for failure to embrace the reforms.

The non-profit MVP Health Care Inc. -- based in Schenectady, N.Y. -- covers more than 700,000 patients in Upstate New York and the east coast.

The company, which did not contribute to the Ingenix database that lead to lower reimbursement rates for patients who went out of network, has agreed to end its relationship with Ingenix.

The Ingenix database allowed companies to underpay patients for out-of-network services, as revealed in an investigation by the attorney general. The database skewed usual and customary rates downward by using faulty data collection, poor pooling procedures and a lack of audits, forcing consumers to pay more than they should.

"Companies like MVP that proactively embrace reform are an essential part of our continued momentum towards change that is nationwide and industry-deep," Attorney General Andrew Cuomo said. "I commend MVP for being a true industry leader and hope that their forward-thinking actions today encourage others to follow suit."

MVP has agreed to end its use of the Ingenix databases for calculating out-of-network reimbursement rates under terms of the agreement.

MVP will also amend member disclosures that will lead to clearer information being provided to members about MVP's method for determining reimbursement rates. In addition, MVP will contribute $535,000 over a five-year period to help fund a replacement database that will set proper out-of-network rates.

"We recognize the attorney general's concern about conflicts of interest inherent in the Ingenix database and appreciate his providing our industry with an independent process that is transparent and helps consumers make more informed health care purchasing decisions," Denise Gonick, MVP Health Care executive vice president and chief legal officer, said.

Cuomo has also given notice to CDPHP, another non-profit insurer that is based in the Capital Region, that he intends to sue the company for refusing to abandon the Ingenix database and embrace his reforms. CDPHP insurers 400,000 patients throughout 29 counties in New York.

The attorney general's suit will seek injunctive relief, restitution, damages and civil penalties for practices consisting of repeated and persistent fraudulent, deceptive and illegal business practices in connection with the ongoing use of the Ingenix databases.

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