$100 Million Healthcare Cost Database Announced

Built with settlement money from health insurance companies, it will help drive down medical costs, says New York Attorney General Andrew Cuomo.



New York Attorney General Andrew Cuomo on Tuesday announced plans to build a database and Web site to provide consumers with impartial information about out-of-network health care costs.

The Web site will allow consumers to see what they'll have to pay out of pocket before getting out-of-network treatments, as well as drive down costs to consumers. The database will supersede an earlier "defective and conflict-ridden" database, inaccessible to consumers, and run by an insurance company with a financial interest in keeping costs high, the attorney general's office said.

Using $100 million in settlement money from companies including Aetna, UnitedHealth Group, and WellPoint, Cuomo launched a new not-for-profit company, FAIR Health, Inc., and an upstate research network headquartered at Syracuse University, to run the database and Web site.

The project will "bring much-needed transparency, accountability and fairness to a broken consumer reimbursement system," Cuomo said in a statement.

The database, which will go online in a year, will provide consumers with information and transparency needed to "penetrate the secrecy and bureaucracy of insurance companies," Nancy Ann DeParle, director of the White House Office of Health Reform, said in the same statement.

FAIR Health and the upstate research network will design a consumer Web site where patients around the country can find out in advance how much they are likely to be reimbursed for out-of-network health care services in their area, the attorney general's office said. The information will be made available for academic research, and the database itself, "in non-industry hands for the first time," will drive healthcare reform efforts, the attorney general's office said.

The database and company are the result of an investigation by the New York Attorney General's office into how the health insurance industry reimburses consumers for out-of-network healthcare charges, which uncovered widespread fraud and conflict of interest, the attorney general's office said. Health insurers reimburse members for visiting so-called "out-of-network" doctors -- doctors not on the insurers' approved list, and used a database called "Ingenix" to set the reimbursement amount.



The attorney general investigated the Ingenix database, a subsidiary of UnitedHealth. "[A]s a subsidiary of the second-largest insurer in the nation, Ingenix had a vested interest in helping set rates low, so companies could underpay patients for out-of-network services," the attorney general's office said. The result was that "consumers were forced to pay more than they should have," by 10-28%.

"Beginning in January, Attorney General Cuomo secured agreements with every national and regional health insurer operating in New York State to end their use of the Ingenix database and financially commit to the new, independent database," the attorney general's office said.

Using the new database, consumers will be able to look up procedures and find out how much they'll be reimbursed, so they'll know the cost of a treatment before they get it, the attorney general's office said.

About 70 percent of insured working families have out-of-network plans that let them choose their own doctors, a system that affects more than 110 million people, Cuomo said.

The insurance industry can benefit from the change too, Robert Zirkelbach, a spokesman for the trade group America's Health Insurance Plans, told the Associated Press. Health insurers say the prices doctors charge for care vary greatly around the country. "Hopefully this database will help shed light on the exorbitant prices that out-of-network providers are charging for some services," Zirkelbach said.

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Find out how smartphone apps are just what the doctor ordered for improving care and helping patients manage their health. Download the InformationWeek report (registration required).

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