Aetna takes $20M hit for Ingenix data use; UnitedHealth to pay $350M more

Payors cough up settlement money over in Ingenix scandal. Image Source: D.M. Siegel, Attorney

Aetna has agreed to pay $20 million to settle accusations from the state of New York that it and other payors used a manipulated system—Ingenix—to shortchange doctors and hospitals on reimbursements for out-of-network services.

In related news, UnitedHealth Group agreed to pay $350 million to settle private class action litigation stemming from similar allegations—which came two days after N.Y. Attorney General Andrew M. Cuomo announced that the payor agreed to a $50 million settlement for his investigation into the way insurers pay for care when members go outside the managed care networks.

The Hartford Courant reported that the $350 will fund a settlement for health plan members and out-of-network providers in connection with procedures performed since 1994.

UnitedHealth's Ingenix unit operates the databases that many payors, including Aetna and Cigna, used to determine what the "reasonable and customary" charge for each out-of-network service should be in each area. Insurers feed billing data to Ingenix.

Aetna said it will pay out the $20 million in installments over five years, at Cuomo's request, to help establish the new database that is part of New York's settlement with UnitedHealth. A nonprofit organization will create the independent database to replace the Ingenix databases at issue and help determine fairer out-of-network reimbursement rates, Cuomo said.

Under Aetna's agreement, it will also pay $60,000 to cover costs of the state’s investigation of the company.

“With this agreement, the tide is turning against the corrupted reimbursement system that took hundreds of millions of dollars from the pockets of patients nationwide. Health insurers will no longer be able to distort their data, leaving patients with unfair bills,” Cuomo said.