MSSNY Urges Health Insurance Companies to Discontinue Policies that Underinsure Patients

Medical Society of the State of New York (MSSNY) President, Dr. Leah McCormack, MD, today called upon New York State health insurance companies to discontinue selling policies that purport to, but in fact fail to, adequately cover out-of-network health care benefits. MSSNY is also calling upon Governor Paterson and Governor-Elect Cuomo to require insurance companies to provide meaningful disclosure to patients regarding anticipated out-of-plan charges.

As Attorney General, Andrew Cuomo was instrumental in requiring health insurance companies to discontinue the use of the flawed Ingenix database for determining payments when patients receive care outside of a plan's network of physicians. In a report, titled The Consumer Reimbursement System Is Code Blue (http://www.ag.ny.gov/bureaus/health_care/HIT2/report.html), he explained how conflicts of interest and a lack of transparency created a system of out-of-network reimbursement that is "unfair, unclear, and needs to be reformed." The Ingenix database was discontinued because it was maintained by a company that is a wholly-owned subsidiary of United HealthCare. Also, the database was being manipulated in ways that resulted in patients incurring higher-than-necessary out-of-pocket costs when they received care from physicians not in their plan's network.

As a result of the AG's investigation, several health insurers were directed to contribute nearly $100 million toward creating a new database maintained by FAIR Health, Inc. This new database will ensure that patients, employers and health insurers have accurate information regarding the true cost of out-of-network medical services. The new database

should be operational in early 2011. However, some companies have sought to evade the transparency goal of the Attorney General by using stealthy methodologies for determining out-of-network payments- such as a percentage of the already-inadequate Medicare fee schedule. Policies appear to adequately cover costs, but, in fact, result in grossly insufficient payments from insurers. Remarkably, these methodologies result in even less coverage – and in many cases, substantially less coverage - than when the insurance companies were using the discredited Ingenix database that Governor-elect Cuomo helped topple when he was Attorney General! This problem is even more acute for patients with chronic medical conditions.

MSSNY is seeking the enactment of legislation and/or regulation that will require a health insurer to clearly identify to enrollees and employers how the payment methodology for out-of-network services relates to the anticipated actual cost of such services, as reported by FAIR Health. Patients should be able to easily understand and anticipate their out-of-pocket costs for a particular treatment. Employers providing health insurance coverage for their employees should also be advised if the coverage leaves their employees significantly underinsured.

"According to the law, patients and employers should get what they pay for. If they paid for the right to see the physician of their choice-who may be out of the plan's network- they should actually be able to avail themselves of this benefit," stated Dr. McCormack. "We urge immediate action to address this injustice, which not only threatens patients with substantial out-of-pocket costs, but also threatens long-standing physician-patient relationships."