Hearing Announcement- Part II: Deceptive Health Insurance Industry Practices

March 30, 2009

WASHINGTON, D.C. – The Senate Committee on Commerce, Science, and Transportation announces the second installment of two full committee hearings on Deceptive Health Insurance Industry Practices – Are Consumers Getting What They Paid For?  These hearings focus on the way that the healthcare industry calculates “usual and customary” reimbursement rates for consumers who choose to receive care from out-of-network doctors and other healthcare providers.

PART II Witness List*

Mr. Stephen J. Hemsley, President and Chief Executive Officer, UnitedHealth Group
Mr. Andy Slavitt, Chief Executive Officer, Ingenix

*not necessarily in order of appearance

PART II: Deceptive Health Insurance Industry Practices – Are Consumers Getting What They Paid For?
Full Committee
Date:  Tuesday, March 31, 2009
Hearing Start Time:  10:15 a.m.
Press Pre-Set Time: 9:30 a.m.
Location:  Room 253, Russell Senate Office Building

Key Quotes From PART I of Deceptive Health Industry Practices Hearing:

• “The health insurance industry has been promising to pay a certain share of consumers’ medical bills, but then they have been rigging health charge data to avoid paying their fair share,” Rockefeller said.  “The result is that billions of dollars in health care costs have been unfairly shifted to millions of American consumers.”

• In written testimony, Dr. Mary Jerome, a cancer patient, shared her personal experience with unfair practices and fees: “When I was diagnosed with cancer, I thought the most difficult hurdle I would face would be the disease. Little did I know, that dealing with my insurance company would be my greater battle, because unknown to me, they were operating with deceptive methods of reimbursement. I had to battle cancer – and I am still battling it – and I had to battle my insurance company to try and get fair coverage. It was almost too much to bear.

• “Nationwide, medical costs are the leading cause of individual bankruptcy, even though the individual usually had insurance,” testified Linda Lacewell, representing the Office of the New York State Attorney General. “Fraudulent under-reimbursement for insured Americans is one part of this negative equation for consumers.”

• Representing the Consumers Union, Chuck Bell explained: “The key problem with the out-of-network reimbursement system is that the UCR (“usual, customary and reasonable”) rates were not calculated in a fair and impartial way. For the last ten years or so, the primary databases that are used by insurers to determine “usual, customary and reasonable” rates have been owned by Ingenix, a wholly-owned subsidiary of UnitedHealth Group.”

• Dr. Nancy Nielsen, president of the AMA, was joined by the Medical Society of the State of New York, the Missouri State Medical Association and several other parties in initiating a class-action lawsuit against United Health Group for using skewed data to determine out-of-network payment rates.  “After nearly a decade of litigation, the AMA is very pleased that United Health Group recognized the importance of restoring its relationship with patients and physicians and is settling the AMA’s lawsuit by agreeing to pay $350 million toward reimbursing the patients and physicians it short-changed, and by confirming in federal court its separate agreement with New York Attorney General Cuomo to end the use of this database and trust its repair and operation to a not-for-profit institution,” Dr. Nielsen testified.