Doctors in Class Action Lawsuit Against Insurance Companies, Alleging Price Fixing, Collusion

Friday, July 31, 2009 by: David Gutierrez, staff writer
Tags: price fixing, health news, Natural News

(NaturalNews) The American Medical Association and a number of state medical associations have filed class action lawsuits against a number of health insurance companies, accusing them of engaging in price fixing in order to underpay doctors and increase the charges paid by patients.

The lawsuits, targeting insurance companies including Aetna, Cigna and WellPoint, allege that the insurers used unfair figures from a database produced by a company called Ingenix in order to set reimbursement rates for doctors who were not part of their health insurance networks. According to the plaintiffs, the use of a standardized database disregarded the different costs of operating in different parts of the country, and unfairly caused excess costs to be passed on to patients.

Ingenix parent company UnitedHealth has already settled a similar lawsuit for $350 million. In order to avoid prosecution by the state of New York, the company also agreed to establish a new database under the supervision of that state's attorney general. UnitedHealth and Aetna have each agreed to contribute $20 million toward this database, while WellPoint has agreed to pay $10 million.

The Ingenix database scandal has sparked a number of state and federal investigations beyond the one in New York. Georgia's insurance commissioner has ordered an investigation into whether any of the 18 insurance companies operating in the state used the Ingenix database. U.S. Sen. Jay Rockefeller has asked the federal government to investigate whether use of the database caused any federal employees to be overcharged for health services.

"I am concerned that federal employees participating in the Federal Employees Health Benefits Program may have been charged excessive out-of-pocket costs because of the health plans' use of the Ingenix database products to determine rates for out-of-network services," he said.

The chief executive officers of both Ingenix and UnitedHealth recently testified before a Senate committee hearing on the scandal.

"I don't know, frankly, how you sleep at night," Rockefeller said, in response to their testimony.

Sources for this story include: www.latimes.com; www.ama-assn.org.