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Aetna Agrees to Pay $120M to Settle Out of Network UCR Litigation

Per the New Jersey Law Journal & Litigation Daily:

"Settled cases may soon outnumber unresolved cases in the long litigation over health insurers' use of an industry database that set "usual, customary, and reasonable" (UCR) rates for medical procedures. On Dec. 7, Aetna Inc. agreed to a $120 million settlement of claims that its reliance on the database led to low reimbursements for procedures performed by out-of-network providers. The Aetna agreement joins previous UCR settlements by UnitedHealth Group Incorporated and Health Net Inc. UCR suits are still pending against Cigna Corporation and WellPoint Inc."

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"The UCR litigation started in 2000, when the American Medical Association and state medical assocations filed a class action suit against UnitedHealth, which ran the Ingenix database that set UCR rates for medical procedures for the entire health insurance industry. Insurers used the Ingenix rates to determine how much they would reimburse for procedures performed by providers not in their network. The AMA and its co-plaintiffs maintained that Ingenix set rates too low, resulting in lower reimbursements by insurers to out-of-network providers, which in turn meant that subscribers had to make higher payments to their providers. (The AMA has kept track of the Ingenix litigation at this online litigation center.)


"Andrew Cuomo, then the attorney general of New York, got involved in the Ingenix controversy in 2007 when his office filed suit against UnitedHealth and the insurers that used Ingenix. According to an investigation by the AG's office, Ingenix data understated the true market rates of medical care by up to 28 percent. The insurers reached a settlement with Cuomo in 2009 in which they agreed to stop using Ingenix and turn over the task of setting UCR rates to a new database, called FAIR Health, to be run by academic institutions instead of the industry.

"In addition to attacking Ingenix, the AMA and the other provider and patient plaintiffs also sued the insurers that relied on the database. Health Net was the first insurer to settle, in 2008, for $225 million. UnitedHealth settled next, in 2009, for $350 million. After legal fees and administrative costs, $250 million was distributed, primarily to providers, Hufford said."

More after the jump...