PRESSBOX

Scott + Scott LLP Pursues Inflated Out-Of-Network Healthcare Fees

In early 2008, attention was called to an alleged scheme within the health insurance industry whereby insurance companies under-reimburse their members for "out-of-network fees." Because they receive insufficient reimbursements from their health insurance company, individual members are being charged inflated out-of-pocket expenses. On behalf of people who received insufficient reimbursements from their health insurance company, Scott + Scott has filed a class action in the District of Connecticut. The action seeks to abolish such practices and recoup costs to insured class members. The defendants include eight high-profile healthcare insurance companies, including United Health Group Inc., Oxford Health Plans, Cigna Corporation, Bluecross/Blueshield Association, Humana Inc., Group Health Insurance Inc., Health Insurance Plan of New York, and Health Net. Inc.

The complaint alleges that most of the large healthcare insurance companies have a licensing agreement or contract with a company called Ingenix, Inc. Ingenix maintains a database that calculates what the defendants call the "reasonable and customary rate" for medical services in a given geographical area. Under the terms of many health plans, an insured patient who goes "out-ofnetwork" for services is reimbursed a percentage of the reasonable and customary rate for such services and that rate is determined by the Ingenix database. However, Ingenix’s calculations are considerably lower than the actual cost of typical medical expenses. The class alleges that the data maintained by Ingenix, which is provided to Ingenix by the insurance companies themselves, is grossly undervalued, resulting in tremendous loss to insureds who, as a class, have lost significant sums of money due to this scheme. By manipulating reasonable and customary rates, the health insurance company defendants were able to keep their reimbursements artificially low and force their customers to absorb a higher share of the costs for out-of-network services, i.e., increase patients’ out-of-pocket expenses. This nationwide class action is currently before Judge Kravitz in Connecticut and Scott + Scott is in the process of filing an amended complaint with the court. 

 

newsletter_oct2008.jpg Source : Scott+Scott October 2008 Newsletter

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