Lawsuits may impact pricing transparency.

A crop of lawsuits highlights the difficulty of determining reasonable provider payment rates. Providers will always want higher reimbursements while insurance companies aim to pay the least amount possible. Unfortunately for consumers, when you are using out of network providers you may get stuck in the middle.

Many insurers use the Ingenix pricing guide to determine “customary” fees. The Ingenix guide is ultimately owned by United. It seems to work well for the insurers; maybe not for providers and consumers. Thus the lawsuits.

AMA sues UnitedHealth – Settlement $350M - The AMA and others claimed that UnitedHealth underpaid physicians and shortchanged consumers when paying out of network claims.

AMA is now suing both Cigna and Aetna on similar claims.

New York AG Andrew Cuomo settles with UnitedHealth- Settlement $50M – This settlement will be used to build a public database to track provider fees and ultimately United will discontinue the Ingenix pricing products in this area.

New York AG Andrew Cuomo settles with Aetna- Settlement $20M- Aetna settlement contributes to the development of the public database and will stop using the Ingenix pricing databases.

Reports state that Cuomo has subpoenaed Cigna, WellPoint and others. No settlements or resolution yet on those.

We’ll keep a watch out for additional settlements, the development of the public database and how this may help consumers.

update 2/18/09: New York AG Andrew Cuomo settles with Wellpoint - Settlment $10M - Wellpoint now joins other larger insurers by paying $10M to the yet to be created nonprofit database company.

WellPoint’s subsidiary Empire BlueCross Blue Shield (“Empire”) is the largest health insurer in New York State, with approximately five million members.

The Nonprofit database company has yet to be selected or announced. We'll stay tuned.