This Math Does Not Add Up

The Hartford Courant reports today that “Consumers nationwide are expected to save millions of dollars on medical care under an industry-changing settlement announced Tuesday
aimed at forcing insurers to pay fairer reimbursement to doctors and hospitals outside their networks.” Under this settlement discussed in yesterday’s Tuesday Tidbits, Ingenix is jettisoning its UCR schedule in favor of an independent database to be developed by a university designated New York’s attorney general, Andrew Cuomo.

The Courant article accurately, in my opinion, presumes that the university database will produce higher reimbursement rates for out-of-network providers than the Ingenix databases. However, all this means is more money in the doctors’ pockets. The consumers who use out of network providers will pay less out of pocket, but the vast majority of consumers who use in-network providers necessarily will pay more. What’s more the consumers who use out of network providers will not benefit dollar for dollar because insurers likely will be forced to raise premiums for everyone as a result of this change.

Remember that it was the American Medical Association that sued Ingenix over this database in 2000 and stood firmly behind Mr. Cuomo. The AMA is in the process of killing the golden goose.