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UnitedHealth announces class-action settlement.
The New York Times (1/16, B3, Abelson) reports, “The insurance giant UnitedHealth Group said Thursday that it had reached a $350 million deal to settle class-action lawsuits claiming it had underpaid patients and doctors.” The agreement resolves three suits against the insurer. The proposed settlement, however, is being contested by “one of the lawyers for the plaintiffs” who “says the money is not enough and has filed an objection with one of the judges overseeing the cases.” Nevertheless, the company stated that it is “confident the agreement will be approved by the court.” The company’s announcement comes two days after UnitedHealth “settled allegations from New York Attorney General Andrew Cuomo by paying $50 million and transferring to a nonprofit group its database that set the amount to be reimbursed when patients used doctors outside their network,” Bloomberg News (1/16, Goldstein, Freifeld) adds. UnitedHealth’s Ingenix subsidiary “maintains the out-of-network fee database to determine the ‘usual and customary’ fees.” The database is used by “hundreds of insurers,” according to UnitedHealth. Cuomo claimed that these insurers “used Ingenix’s ‘defective and manipulated’ database to set artificially low reimbursement rates.” The class-action suit against UnitedHealth “alleged that insurers lowered the data they contributed, which then helped them lower their payment obligations,” the AP (1/16, Murphy) notes. As a result, “doctors or other providers often billed patients for the difference.” According to the Chicago Tribune (1/16, Japsen), UnitedHealth stated that its agreement “contains no admission of wrongdoing.” The money is expected to “fund a settlement with health plan members and providers in connection with claims dating back to 1994.” In addition, Thursday’s agreement may “lead to settlements from other insurers” that used Ingenix as well. Minnesota’s Star Tribune (1/16, Yee) and the Minneapolis/St. Paul Business Journal (1/15, Stevens) also covered the story. Aetna agrees to $20 million settlement in reimbursement system probe. The AP (1/16) reports, “Health insurer Aetna Inc. said Thursday it will pay $20 million to help set up a database to calculate out-of-network medical payments in an effort to end a dispute with UnitedHealth Group Inc. over a system that allegedly passed more costs to plan members.” Working with the office of New York Attorney General Andrew Cuomo, Aetna is expected to “set up an independent public database,” as well as “a system to help plan members find out what they will have to pay out of pocket before they visit a doctor who is not part of Aetna’s network,” under the agreement. Earlier this week, Cuomo announced that UnitedHealth had agreed “to shut the database operated by its Ingenix subsidiary, which insurers use to help determine ‘reasonable and customary’ costs for claims for out-of-network physicians,” Bloomberg News (1/15, Freifeld, Goldstein) added. After conducting “an industrywide probe of out-of-network claims,” Cuomo determined that “the Ingenix database was rigged.” He contended that the “corrupted reimbursement system…took hundreds of millions of dollars from the pockets of patients nationwide.” Under UnitedHealth’s settlement, the insurer will “pay $50 million to fund a nonprofit entity to provide independent data on costs.” Dow Jones Newswires (1/16, Bray) also covers the story.

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