Medical News

NORTH TEXAS (CBS 11 / TXA 21) ― The Texas Medical Association (TMA) is joining a legal fight against insurance companies. The TMA says it wants to expose what it sees as insurance companies manipulating data to deflate prices and inflate medical bills for consumers.

Many consumers have complained to Texas authorities that they feel frustrated when it comes to reimbursement by their health insurer. Michael Bailey, a former Aetna employee, pays for health insurance every month. But when it comes to reimbursement, he feels, Aetna is kind of stingy. "It is a business, it is a business first, it is a business first."

What does Bailey mean by 'stingy'? According to his insurance statement, when his doctor charges $154 for an x-ray or lab service, Aetna reimburses the doctor $9. On medicine billed for $140, Aetna says the service is worth $9. If you do the math, it reveals Aetna will pay $18 for nearly $300 worth of bills. These low reimbursements mean Bailey will be trying to meet his $1500 deductible for a long time. "You would have to go to the doctor on a fairly consistent basis pretty much during the year to meet your deductible."

Dr. Ramón Garcia is Michael Bailey's physician. He says his rates are already low and the rates insurance companies come up with are hurting his business. "Now we have to see more patients in the day to cover overhead and survive."

Nowhere is reimbursement more contentious than when you see a doctor that isn't on your insurance plan. These out of network doctors filed suit, along with the Texas Medical Association which represents doctors, to stop insurance companies such as Aetna and Cigna, from using databases to calculate what's known as usual, customary and reasonable charges, or UCR for short.

  Read the complaint against Aetna.
  Read the complaint against Cigna.

Dr. Bohn Allen is the former president of the Texas Medical Association.
"When the insurance companies stand behind the curtain - and make their own formulas - and cheat the patient or make them pay more – it's like pulling back the curtain in the Wizard of Oz and seeing how the thing actually works."

For example, an out of network doctor might charge $200 for an office visit. The insurer says, the customary rate is really $100 and pays 70% of the cost. So, you get reimbursed $70 and owe the doctor $130. Texas has about 170 consumer complaints on this issue; with a third of those in North Texas. As Bailey puts it, "You are constantly paying more, more, more and they are paying less, less, less."

The Texas Medical Association states Aetna and Cigna use "secret data" to "scam physicians and patients by short changing reimbursements." The "secret data" is kept by Ingenix, a company owned by another insurance company.

In January, the New York Attorney General, Andrew Cuomo settled with insurers after issuing a report called Consumer Reimbursement System - Code Blue. "Once again it seems like the proverbial little guy is going to pay the highest price," Cuomo said of the system. New York officials analyzed more than one million bills and consumer payments and found that insurers under-reimbursed consumers by millions of dollars. Those who analyzed the information described the Ingenix database as "tainted" to "save insurers money."

Dr. Allen says he doubts the TMA case will ever go to trial, because "They [insurance companies] don't want to open up their books and open up their deceptive trade practices."

In a statement to CBS 11 News, Aetna's chief medical officer states the current lawsuit is "disappointing" and Cigna states it's "without merit". As part of the New York settlement, a new database will be used to determine pricing but until then insurers are continuing to use the Ingenix database.

The Texas Attorney General tells CBS 11 News that it is actively investigating insurance companies regarding this conduct.

Below are the statements issued by North Texas health insurers:

AETNA
"The lawsuits filed by the American Medical Association (AMA) and some state medical associations are disappointing. We hope to continue our collaborative dialogue with the medical community, and this will not help advance what we believe is our mutual desire to transform health care and provide people with access to affordable, high quality health care. During the past few years Aetna has been actively engaged with the medical community on a range of issues, from initiatives that will improve the ability of physicians to do business with us, to major public health efforts such as racial and ethnic disparities in health care and genetic testing. We have simplified business transactions with physicians, increased transparency of policies and processes, and worked with the medical community on evidence-based guidelines in medicine." - Chief Medical Officer, Lonny Reisman, M.D.

CIGNA
"The class action suit filed by the American Medical Association and other physician groups reasserting prior allegations regarding purported flaws in the Ingenix database is without merit and will be vigorously defended.

CIGNA used Ingenix data to determine reasonable amounts to pay for the small percentage of claims submitted for services provided by non-contracted health care professionals. CIGNA disclosed to doctors and consumers its use of the third-party Ingenix database as the basis of its out-of-network rate calculation. The use of the reasonable and customary methodology is a valuable method for our customers to manage costs and reduce upward pressure on the premium rates paid by individuals while maintaining access to a broad array of doctors.

In keeping with the rest of the industry, many of CIGNA's health plans give individuals the option of choosing to receive care from a physician who is in the company's network or from a doctor that doesn't have a contract and isn't in the network. The CIGNA network provides access to doctors who provide high-quality care and who have agreed to charge reasonable fees for their services. If an individual decides to receive care from an out-of-network doctor, then the doctor is reimbursed based on a set, previously agreed upon, fee, and the individual is responsible for the difference between the set fee and the billed charge.

CIGNA's payments to out-of-network doctors are robust and fair, and greater transparency in regards to physician pricing will prove that point. For instance, for a 15-minute office visit in New York City - the most common service – health plans on average allow $74 to in-network doctors and as much as $160 using the Ingenix database to out-of-network doctors. Medicare pays $70 to in-network doctors and $77 to out-of-network doctors for the same office visit. However, on average, out-of-network physicians (who charge in excess of the amount previously set by the Ingenix database) charge consumers $214 – for the same service. More than 95 percent of office visits are made to in-network physicians today, and CIGNA believes that increased transparency around physician pricing will further support efforts to drive lower cost, high quality care."

UNITED HEALTHCARE (Ingenix is its subsidiary)

"As part of our AMA settlement agreement, a $350 million fund is being established by UnitedHealth Group for distribution among health plan members and out-of-network physicians and other health care professionals related to out-of-network benefits since 1994. This fund will be distributed according to an allocation plan subject to the Court's approval (approval is still pending with the court). A portion of the interest from the fund also will be used to establish a joint institute that will focus on facilitating a deeper dialogue between insurers and physicians regarding how to better provide cost-effective services to patients. Individuals eligible for the fund will receive notice of the process for submitting claims in a form approved by the court.

Distribution of the settlement fund will not be administered or handled by UnitedHealth Group-related claims review system. The fund will be distributed by an independent administrator, according to an allocation plan subject to court approval. Health plan members who are eligible can expect to be notified by the independent administrator, either by mail or by publication, about the process for submitting claims. During the notification process, you will receive contact information for the independent claims administrator, who will be able to answer any questions you may have." Approval of the allocation plan is still pending with the court."

BLUE CROSS BLUE SHIELD (Not part of the NY Attorney General's Settlement)

"Blue Cross and Blue Shield of Texas ("BCBSTX") does not as a practice use the Ingenix databases. However, BCBSTX has contractually agreed at the request of a number of its self -insured clients to use the Ingenix databases to determine the allowed reimbursement amount when individuals enrolled in those benefit plans receive services from non-contracted providers. BCBSTX is not a party to the settlement agreements that the New York Attorney General has reached with a number of insurers, as BCBSTX is not a licensed insurer in New York."

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)