United HealthGroup to pay $50M to settle charges of rigged rates

By Bernie Monegain
11:53 AM

United HealthGroup has agreed to a $50 million settlement following an investigation by New York Attorney General Andrew Cuomo into charges that the insurer overcharged its members millions of dollars for healthcare.

"This is a huge scam that affected hundreds of millions of Americans ripped off by their health insurance companies," Cuomo said in a statement Tuesday. "This was unethical, and it robbed vulnerable patients of insurance reimbursements they deserved."

Cuomo and members of his staff held a press conference Tuesday at St. Vincent's Catholic Center in New York, where Mitch Zamoff, general counsel for United HealthGroup, also spoke.

At issue is the Ingenix database, owned by United HealthGroup and used by the insurer to calculate reimbursement rates.

"The solution is we have to replace Ingenix," Cuomo said.

Under the settlement, United HealthGroup agreed to spend $50 million to establish a nonprofit, independent company to replace Ingenix. Once that company is established - Cuomo estimates it will take six months - the Ingenix database will be shut down.

"We view this as a positive event for United Healthcare and the healthcare system," Zamoff said. "We regret that conflicts of interest were inherent in the Ingenix database."

Cuomo revealed the results of his investigation nearly a year ago and announced on Feb. 13, 2008, that he was conducting an industry-wide investigation into a scheme by health insurers to defraud consumers by manipulating reimbursement rates.

At that time Cuomo charged that Ingenix, a subsidiary of United HealthGroup, served as a conduit for rigged data to the largest insurers in the country, including United HealthGroup, Aetna, CIGNA, Wellpoint and Empire Blue Cross Blue Shield.