Washington (ChatterShmatter) – The nation’s second largest health insurer UnitedHealth Group, Inc was found guilty of what is being called blatant and obvious fraud, and will be forced to pay $350 million in damages to compensate affected customers.
Attorney General Andrew Cuomo is leading the charge to reformation of the business practices of the medical billing and reimbursement community.
The deal agreed to on Thursday with UnitedHealth will require them to commit $50 million of the settlement to developing a new pricing system all the while cleaning up their billing and reimbursement practices.
The centerpiece of the fraudulent activity is Ingenix, the nation’s largest medical billing information provider, who sets “usual and customary” rates for medical procedures. It has been discovered that Ingenix has been providing lower reimbursement costs than the amount the patients paid, thereby the insurers would be required to pay less than the amount required for the services provided.
Aetna, the nation’s third largest insurer has committed $20 million towards the development of an impartial third party to determine the rates for out of network procedures. The task force headed by Cuomo has determined that it would cost approximately $100 million to develop a billing system free from conflicts of interest which result in fraudulent activity as described above.