On Tuesday, March 23, 2010, President Obama made history when he signed national healthcare reform legislation into law. Over the past year, Palmer College of Chiropractic has closely watched the healthcare reform debate and subsequent actions taken by Congress. Palmer administrators, faculty, staff, students and alumni have been working behind the scenes with government officials, other chiropractic organizations and at the grass-roots level for more than a year to facilitate chiropractic’s inclusion in healthcare reform legislation, and with the signing of this new law, these joint efforts have resulted in several provisions that are positive for chiropractic.

Historic Pro-Chiropractic Provisions Will Become Law

(Arlington, Va.) -- The U.S. House of Representatives passed HR 3590, the Senate-passed version of national health care reform legislation, tonight. The final vote took place after a nearly 13 month battle, culminating in a contentious struggle to garner votes from undecided members of the Democratic majority in Congress.

This means that the provisions contained in HR 3590 now only await President Obama’s signature to be enacted into law. These provisions include an important provider non-discrimination provision long championed by the American Chiropractic Association (ACA). Incorporation of this provider non-discrimination provision, also known as the “Harkin Amendment,” was achieved primarily due to the efforts of Sen. Tom Harkin (D-Iowa), with help from other key players such as Sen. Chris Dodd (D-Connecticut). Although he did not support the final bill overall, Sen. Orrin Hatch (R-Utah) also lent his support for the advancement of the non-discrimination provision.

“Regardless of how you feel about this legislation and its overall impact on the nation, it has to be recognized as an historic first for the chiropractic profession. We now have a federal law applicable to ERISA plans that makes it against the law for insurance companies to discriminate against Doctors of Chiropractic and other providers relative to their participation and coverage in health plans. Such discrimination based on a provider's license is inappropriate and now must stop,” said ACA president, Dr. Rick McMichael. “While this does not fully level the playing field for doctors of chiropractic in our health care system, this is a highly significant step that has the potential for positive, long-range impact on the profession and the patients we serve. Congress has finally addressed the issue of provider discrimination based on one's license, and they have said that such discrimination must stop.”

The provider non-discrimination provision (Section 2706) to be enacted into law reads in part: “A group health plan and a health insurance issuer offering group or individual health insurance coverage shall not discriminate with respect to participation under the plan or coverage against any health care provider who is acting within the scope of that provider’s license or certification under applicable State law.”

Regarding this provision, John Falardeau, ACA’s Vice President of Government Relations said, “The Harkin non-discrimination language will be applicable to all health benefit plans both insured and self-insured. National health care reform is designed to eventually cover 30 million currently uninsured Americans. The non-discrimination language will, over time, apply to those individuals as well. However, that number of covered individuals pales in comparison to the 55 percent of workers who are currently covered by self-insured plans that will be affected by the Harkin non-discrimination language. The potential impact in this regard cannot be overstated.”

Additionally, the legislation passed by the House includes two other provisions that impact the chiropractic profession. Doctors of chiropractic are specifically included as potential members of interdisciplinary community health teams. These teams support the development of medical homes by increasing access to comprehensive, community based, coordinated care. Community health teams are integrated teams of providers that include primary care providers, specialists, other clinicians, licensed integrative health professionals and community resources to enhance patient care, wellness and lifestyle improvements. The language in the bill ensures that doctors of chiropractic can be included in these patient-centered, holistic teams. Dr. McMichael noted, “This language was a critical inclusion to give doctors of chiropractic increased opportunities to be fully engaged as part of the health care team.”

Furthermore, the legislation establishes a National Health Care Workforce Commission to examine current and projected needs in the health care workforce. The commission specifically includes doctors of chiropractic by defining them as part of the health care workforce, and includes them in the definition of health professionals. In addition, chiropractic colleges are included among the health professional training schools to be studied. The National Health Care Workforce Commission is tasked with providing comprehensive, unbiased information to Congress and the Obama Administration about how to align federal health care workforce resources with national needs. Congress will use this information when providing appropriations to discretionary programs or in restructuring other federal funding. The language in the bill guarantees that the need for doctors of chiropractic will be addressed when considering federal health care workforce programs, another very important inclusion.

Assuming final modifications to the bill are ultimately agreed to by the Senate; ACA will then publish a detailed analysis of the entire legislation, including a timeline for when certain provisions become effective. Additionally, ACA will maintain an active watch over the implementation of the legislation over the next several years and will offer its views regarding proposed regulations that will likely be developed in order to fully implement the new law. ACA will also respond to any future legislation such as “technical corrections” and other modifications that might be considered. Dr. McMichael noted, “Our partners on the Chiropractic Summit were important team members in securing these critical inclusions for the benefit of our profession and our doctors. We thank all team members for their good collaborative work on this major effort and future efforts to come.”

Late Tuesday night, the President signed into law a bill that delays until March 31, 2010 the 21% Medicare fee cuts that were scheduled to take effect in 2010.  Further Congressional action will be necessary to stop the implemenation of these cuts for the remainder of the year.  Please contact your federal legislators in Washington today to urge them to take permanent action on this issue.

On Wednesday, Dec. 16, as part of the FY 2010 Defense appropriations bill, the House of Representatives passed legislation that would delay the 21 percent Medicare fee cuts until March 2010.  The Senate has yet to vote on this bill.  We urge members to contact your senators today, to ask them to stop the 21 percent Medicare fee cuts for 2010.  The Senate is expected to take a vote on this bill in the next few days, so your immediate action is needed.  Please visit the ACA Legislative Action Center  where you can create an e-mail message quickly and easily to send to your senators to tell them to block the implementation of these drastic fee cuts. A template e-mail is included at the Action Center.

Many providers are receiving notices that they must complete a Fraud, Waste and Abuse (FWA) training program from Medicare Advantage Plans.  In 2007, CMS regulations mandated that Medicare Advantage (MA) programs require MA providers to take a FWA training program once a year, beginning in 2009.   However, in response to concerns from the provider community, CMS has recently proposed to revise this requirement.  In the Oct. 22 Federal Register Proposed Rule, CMS stated that individuals who were enrolled as Medicare providers should not be required to complete the FWA training because it was redundant to the Medicare requirements for enrollment.  This proposal has not become a final regulation, but will most likely become final next year.  At this point, MA providers are required to take the FWA training. Many individual MA plans are offering their own FWA training courses.  An example of an available training course can be accessed here.

The New York State Insurance Fund today announced a state-of-the-art online medical bill inquiry service with the expansion of its electronic Explanation of Benefits (EOB) for doctors treating workers’ compensation injuries covered by NYSIF. In making the announcement, NYSIF Chief Deputy Executive Director Francine James said the upgrades are part of NYSIF’s electronic medical billing and inquiry system available to all medical providers treating NYSIF claimants. “We are pleased with the upgrades we’ve made to our electronic EOB system and we anticipate that medical providers will be, too,” Ms. James said. “This system is a real time saver for doctors, their billing staffs and for our own personnel – and by including more information on screen NYSIF is introducing a state-of-the-art system for workers’ compensation medical bill inquiries.” The new EOB service gives providers a more detailed explanation of medical bill payments made by NYSIF, alerts them to bills that have not been received, or reasons why a bill hasn’t been paid. NYSIF introduced its online EOB for workers’ compensation medical providers in 2007, an Oracle based system built in-house by NYSIF system developers. The Fund followed soon thereafter with giving providers the option to submit medical bills electronically to NYSIF. The EOB upgrades are based on the most frequently asked questions received from doctors’ billing offices. The system has been a value added service, saving time and money by providing convenience for medical administrative staffs transacting business with NYSIF. According to NYSIF medical claims team, some of the more common reasons for non-payment of workers’ compensation medical bills submitted to NYSIF include pending claim status, claim disallowance, claim settlement, invalid jurisdiction, lack of proper medical records, and duplicate billing of paid procedures. All of this information is now accessible to medical providers and their staffs 24/7/365 days a year, spelled out clearly in one location for all medical bills submitted on every claim. NYSIF’s expanded electronic EOB offers an express means by which to cut wait time on billing errors, avoid payment delays and eliminate the time and resources NYSIF and doctors’ staffs devote to billing questions. Medical bill inquiries made online at nysif.com provide users with NYSIF’s claim number, the claimant’s name, date of injury, complete contact information for the NYSIF case manager and office assigned to the case, the NYSIF assigned bill number, bill date, date received and bill status for every claim on record. As an insurance carrier, NYSIF assigns its own claim number to workers’ compensation claims. The New York Workers’ Compensation Board assigns a different number to the claim. NYSIF lists both numbers in the summary to avoid potential confusion for administrative personnel not familiar with the state workers’ compensation system. The summary includes billing codes, total charges and amounts paid, along with a reason why only partial payment may have been made for certain billed procedures. A short narrative summarizes the check number, amount paid, date issued and mailing address on record. Users have the option to click on the check number to see a complete explanation of payments included in the check and to print the complete EOB. The service is free to any medical provider doing business with NYSIF. Medical providers may only access the EOB for the bills they submit. By leading to less time spent on billing questions, either on the phone or exchanging e-mail, NYSIF believes the new features will further increase productivity and efficiency for medical office personnel using the system and for NYSIF staff. NYSIF, a non-profit organization of the state of New York created as part of the Workers' Compensation Law of 1914, is New York’s largest workers’ compensation insurance carrier. By law, NYSIF is a competitive insurance carrier that sells workers' compensation and disability benefits insurance to any employer doing business in New York State. Approximately 185,000 employers hold NYSIF workers' compensation insurance policies, constituting about 41 percent of the market.

The following is a summary of the key provisions relevant to chiropractic within the new Insurance Omnibus Law. Section 3, 19 & 32 Prohibits an insurer or HMO from implementing an adverse reimbursement change to a contract with a health care provider unless insurer or HMO gives health care professional 90 days written notice of the change and allows health care professional 30 days to terminate his/her contract with insurer or HMO. Effective date is January 1, 2010. Section 4 & 17 Insurers offering comprehensive policies establish grievance procedures and provide access to care consistent with insurance law. The effective date is January 1, 2011. Section 6 Requires insurers and HMOs to pay claims submitted electronically within 30 days and expands the provision of the PROMPT PAYMENT LAW to self-insured municipal cooperative health plans. This is effective January 1, 2010. Section 7 Prohibits insurers and HMOs from denying a claim on the basis that they are coordinating benefits – unless insurer or HMO has reasonable basis to believe enrollee has other insurance which is primary. Effective January 1, 2010. Section 8 If prompt payment violation is determined, an insurer or HMO shall not be subject to penalty if insurer or HMO has processed at least 98% of claims submitted within the calendar year. In the past, the insurer would pay claims to avoid penalties, but then implemented retrospective audits. This is effective January 1, 2010. Section 9 Health care claims must be submitted by health care professional within 120 days after date of service. Allows health care professionals to request reconsideration of a claim that is denied as untimely. If health care professional demonstrates untimely claim was a result of an unusual occurrence and health care professional has pattern of timely claim submission. HMO/insurer may reduce untimely claim by 25%. Effective April 1, 2010. Section 10 This portion contains most of the NYSCA drafted language on retrospective audits for the benefit of all title VIII health care professionals. Limits of look back period of time payers can go when making routine retrospective audits to 24 months. In addition, before payer can commence a recovery effort, payers must give providers written notice at least 30 days in advance of any recovery effort providing the practitioner with vital information concerning the claim and a reasonably specific explanation of any proposed adjustment as well as an opportunity to challenge the overpayment recovery effort. No time limit exists in situations where the payer holds a reasonable belief of fraud, intentional misconduct or abuse of billing. Effective January 1, 2010. Section 12, 13, 14 & 31 Inhibits insurers and HMOs from treating a hospital that participates within a network as a nonparticipating provider solely because the health care provider admitting or rendering services to the insured/enrollee is a nonparticipating provider. These sections also prohibit insurers and HMOs from treating a health care provider that participates within a network as a nonparticipating provider solely because services are rendered in a nonparticipating hospital. This is an important change, particularly for chiropractors and/or hospital based chiropractic practices. Effective date is January 1, 2010. Section 20 & 33 These provisions allow a newly licensed professional and providers relocating to NY to join the group practice of credentialed par providers participating in a HMO/MCO, a nonprofit indemnity or medical service plan to be provisionally credentialed by the health care plan until such time as the plan makes its final determination regarding the provider’s application. Effective date is October 1, 2009. Section 27 & 40 This requires an external appeal agent to notify a provider when appropriate of an external appeal determination. Effective date is January 1, 2010

The American Chiropractic Association (ACA) obtained on June 5 a draft bill designed by Sen. Edward M. Kennedy (D-Mass.), chairman of the Senate Committee on Health, Education, Labor and Pensions (HELP). This opening salvo is the first of many pieces of health care reform legislation that will be debated in the coming months within the U.S. Senate and House of Representatives. The ACA Board of Governors discussed the draft June 6 during a previously scheduled meeting. The ACA government relations department is carefully reviewing the bill. According to ACA’s government relations staff, the bill, titled the “American Health Choices Act,” would direct individuals and businesses to obtain health care insurance. The draft contains language creating a federally-sponsored “public plan” that would compete with private insurers. The public plan aspect of the legislation is troublesome to Republicans, many of which have declared that a public plan would wipe out current private insurance; however, the public plan option recently gained approval by the Obama administration. Other major provisions in the draft bill include: -----Providers and hospitals that serve patients under the new public plan would be paid 10 percent above current Medicare rates. -----Premiums will cover most of the costs associated with the public plan. -----New insurance exchanges called “Gateways” would be created to enable individuals to shop for insurance, similar to how consumers shop for air fares on Internet travel sites. -----Federal subsidies for mid- to low-income families to purchase insurance. The bill does not include specific language regarding physician status or services that would be available under the public plan. Instead, a new “Medical Advisory Council” would decide a schedule of services considered “essential health care benefits.” Each year, the council would issue new recommendations, which would take effect automatically unless rejected by Congress. The HELP Committee is scheduled to address the bill the week of June 15. The other Senate committee of jurisdiction, Finance, is looking to address health care reform sometime later in June. The House of Representatives is planning to address health care reform throughout the summer and pass a bill before the August recess. ACA urges all doctors of chiropractic to continue to contact their legislators in Washington and demand that chiropractic interests are protected in any health care reform plan developed on Capitol Hill. Doctors of chiropractic and state associations are also strongly encouraged to enlist their patients and other chiropractic supporters in the ChiroVoice advocacy network. ACA will continue to issue updates on pertinent reform activities as they become available. Stay informed throughout the national health care reform debate via:

Members should be aware; the FTC has developed Red Flag Rules which require “creditors” – including health care providers -- to conduct a risk assessment to determine if they have accounts at risk for identity theft. These rules went into effect in November, 2008 with an implementation date of May 1, 2009. The AMA disputed the FTC’s inclusion of health care providers as creditors, but the FTC determined that health care providers do fall within the ambit of the rules. According to the Equal Credit Opportunity Act, a “creditor” is “any person who regularly extends, renews or continues credit.” “Credit” is defined as a “deferment of payment for goods or services rendered.” For health care providers, this means every time you submit a health insurance claim to an insurance carrier first, and then bill the patient for co-payments or deductibles after services are rendered you are deferring payment and thus are acting as a “creditor.” Medical identity theft occurs when an individual seeks care using the name or insurance information of another person. This can result if false billing and potentially life-threatening corruption of a patient’s medical records. The bottom line comes in assessing risk in your practice of possible identity theft. The FTC requires that office practice’s have written policies in place – an “Identity Theft Prevention Program” -- and a plan to “prevent and mitigate” the effects of identity theft. If you have a small practice in which all your patients are known to you or your staff, you are at lesser risk and may only need an initial copy of a state issued photo ID that is checked at each visit to ensure that the patient is who he/she says she is. There is greater risk in a large multi-doctor office or facility. It would also be required to have a procedure in place in the event that you are notified by a state or local agency that the consumer’s identity has been misused. In order to assist the membership with implementation of the Red Flag Rules, the NYSCA has put together a “Model Identity Theft Prevention Program” for members. In addition to all the information and contacts you would need in case of identity theft, this includes a “turn key” manual that only requires you to fill in your office information. They do require you to have a meeting to explain the new procedures to your staff. Everything else is done for you. Many groups are selling packages for $100 or more; as a member benefit, the Red Flag Rules package can be downloaded from the NYSCA website free-of-charge. Download your copy, fill in the information and be in-compliance by the May 1, 2009 deadline. Membership has its privileges. Sincerely, Mariangela Penna, DC President, New York State Chiropractic Association GO TO MEMBERS ONLY TO VIEW THE “Model Identity Theft Prevention Program” by clicking on the link below:

Red Flags Rule Enforcement Delayed Three Months Due to Congressional pressure supported by ACA, the Federal Trade Commission announced today it will delay enforcement of the new "Red Flags Rule" until August 1, 2009. This will give creditors and financial institutions more time to develop and implement written identity theft prevention programs. ACA will continue to monitor this important policy and support members in compliance. More information on the Red Flags Rule

Doctors beware: There are many rumors within the chiropractic profession about Medicare policies. ---Did you know that you still have to bill Medicare if you are a non-participating (non-par) physician? ---You still have to follow Medicare documentation requirements if you are non-par? ---You are still subject to reviews if you are non-par? There is no visit cap for chiropractic in Medicare? Read the MLN matters article by clicking on the link below:

Federal Trade Commission (FTC) regulations stating that financial institutions and creditors are required to develop and execute written identity theft prevention programs otherwise known as the “Red Flags Rules,” are slated to go into effect May 1, 2009. Until recently, there was much ambiguity regarding the regulations and questions were raised as to whether physician offices fell under the FTC red flags guidelines. In February, the FTC issued a statement clarifying that Identity Theft Red Flag Rules do indeed apply to physicians including doctors of chiropractic. Read the FTC statement by clicking on the link below:

(Arlington, Va.) -- The American Chiropractic Association (ACA) and the Association of Chiropractic Colleges (ACC) today expressed support for newly introduced legislation in the U.S. House of Representatives designed to codify chiropractic as a covered service through the Department of Veterans Affairs (VA) health care system. Representative Bob Filner, D-Calif., introduced HR 1017 late last week. The bill, which is similar to legislation introduced in 2007, specifically requires the VA to have a doctor of chiropractic on staff at all VA medical facilities by 2012. It also amends the current statute, the Department of Veterans Affairs Health Care Programs Enhancement Act of 2001, ensuring that chiropractic benefits cannot be denied. “The ACA and ACC applaud the work of Rep. Filner as he continues to advocate for both chiropractic and our nation’s veterans,” said ACA President Glenn Manceaux, DC. “Veterans want, need and deserve access to chiropractic care, and it is our goal to ensure that chiropractic is ultimately available and accessible at every major VA health care facility.” Further, ACC President Dr. Carl Cleveland III noted, “The chiropractic educational community welcomes the opportunity to position its graduates and the profession to serve our nation’s veterans, and this legislation allows veterans’ easier access to chiropractic care. With a reported 49 percent of eligible veterans returning with neuromusculoskeletal issues, the need for expanded access to chiropractic services has never been more crucial.” Through previous congressional action, chiropractic care is now available at 32 VA facilities across the country; however, in the more than 120 facilities without a chiropractor on staff, the chiropractic care benefit Congress authorized for America’s veterans remains virtually non-existent. Detroit, Denver, and Chicago are a few examples of major metropolitan areas without a doctor of chiropractic available at the local VA medical facility. According to ACA Vice President of Government Relations John Falardeau, without a congressional directive, further expansion to VA facilities will be on a case-by-case basis and will be excruciatingly slow. The ACA believes that integrating chiropractic treatment into the VA health care system would not only be cost-effective, it would also speed the recovery of many of the veterans returning from current operations in Iraq and Afghanistan. A January 2009 report from the Veterans Health Administration indicates that over 49 percent of veterans returning from the Middle East and Southwest Asia who have sought VA health care were treated for symptoms associated with musculoskeletal ailments – the top complaint of those tracked for the report. HR 1017 has been referred to the House Committee on Veterans’ Affairs. To view the full text of HR 1017, click here. Contact your Member of Congress and urge them to cosponsor HR 1017.

CIGNA Signs Agreement to Deliver Fair Rates to Patients Nationwide; Will Contribute $10 Million to New, Independent Database Cuomo Also Announces Intent to Sue Rochester-Based Excellus for Defrauding Consumers by Manipulating Rates, Relying on Outdated Information Attorney General Andrew M. Cuomo today announced further expansion of his historic reform of the national healthcare reimbursement system. Cuomo has reached an agreement with CIGNA (NYSE: CI), one of the nation’s ten largest health insurers, in his ongoing drive to end industry-wide conflicts of interest and generate fair reimbursement rates for working families nationwide. CIGNA will end its relationship with the defective Ingenix database, as well as pay $10 million to a qualified nonprofit organization that will establish a new, independent database to help determine fair out-of-network reimbursement rates for consumers. The agreement today with CIGNA brings the total dollar amount secured by Attorney General Cuomo for the new database to over $80 million. Attorney General Cuomo also announced that his office has served a five-day notice of intent to sue Excellus Health Plan (“Excellus”) for defrauding consumers and patients across Upstate New York by manipulating reimbursement rates for out-of-network services. Rochester-based Excellus is the largest not-for-profit insurer in New York State, and is the largest insurer in the Rochester and Syracuse areas. Excellus and its affiliates serve nearly two million people in 31 counties, with approximately 872,000 members in Rochester, 549,000 in Syracuse and Central New York, 289,000 in Utica, and 165,000 in Buffalo, where it operates as Univera Healthcare (“Univera”), one of the Buffalo area’s three largest insurers. Cuomo's case against Excellus includes information provided by the Syracuse Post-Standard newspaper showing that Excellus was under-reimbursing the Post-Standard's employees, who were members of Excellus. “Today’s agreement with CIGNA is the latest domino to fall in our industry-wide sweep of the healthcare reimbursement system and brings us another step closer to complete reform,” said Attorney General Cuomo. “Unfortunately, on the same day, we have another company that has continued to stand squarely in the way of our efforts. The bottom line is that Excellus failed to satisfy promises made to its members to deliver fair rates and give patients what they paid for. Let this notice today serve as a firm reminder to other insurers who have not yet resolved this problem - we will not hesitate to pursue legal action against companies that defraud patients.” Earlier this month, Attorney General Cuomo announced sweeping reforms to end the manipulation of reimbursement rates at the expense of patients across the country. After a year-long investigation revealed that the health insurance industry relied on a defective database to set rates, Cuomo reached groundbreaking agreements with UnitedHealth Group Inc. (“UnitedHealth”) (NYSE: UNH), the owner of the Ingenix database and the second-largest insurer in the country, along with Aetna (NYSE: AET), the nation’s third-largest health insurer. After those initial agreements, Cuomo brought his reform efforts to Upstate New York, securing agreements with the Schenectady-based MVP Health Care/Preferred Care as well as Independent Health and HealthNow, both Buffalo-based insurers. Attorney General Cuomo’s investigation concerned allegations that as a subsidiary of UnitedHealth, Ingenix had a vested interest in helping set rates low, so companies could underpay patients for out-of-network services. The investigation revealed that the database intentionally skewed “usual and customary” rates downward through faulty data collection, poor pooling procedures, and the lack of audits, meaning consumers were forced to pay more than they should have. The investigation found the rate of underpayment by insurers ranged from ten to twenty-eight percent for various medical services across the state. The Attorney General found that having a health insurer determine the “usual and customary” rate - a large portion of which the insurer then reimburses - creates an incentive for the insurer to manipulate the rate downward. The establishment of a new database, independently owned and operated by a nonprofit organization, is designed to remove this conflict of interest. Under the agreement secured with UnitedHealth, the database of billing information operated by Ingenix will close. UnitedHealth also agreed to pay $50 million to a qualified nonprofit organization that will establish a new, independent database to help determine fair out-of-network reimbursement rates for consumers throughout the United States. Cuomo’s agreement with Aetna, which will also end their relationship with Ingenix, secured another $20 million for the database. Today’s agreement with CIGNA, which insures 12 million people nationwide, brings the total dollar amount to $80 million. Under the terms of the agreement: • CIGNA will pay $10 million toward a new, independent database run by a qualified nonprofit organization; • The nonprofit will own and operate the new database, and will be the sole arbiter and decision-maker with respect to all data contribution protocols and all other methodologies used in connection with the database; • The nonprofit will develop a website where, for the first time, consumers around the country can find out in advance how much they may be reimbursed for common out-of-network medical services in their area; • The nonprofit will make rate information from the database available to health insurers; • The nonprofit will use the new database to conduct academic research to help improve the health care system; • The nonprofit will be selected and announced at a future date. Cuomo also announced today that he has served a five-day notice of intent to sue Rochester-based Excellus for defrauding consumers across the state. During the investigation into the use of the Ingenix databases, the Attorney General has uncovered a trove of e-mails pointing to an egregious scheme by Excellus to defraud its members by using obsolete fee schedules to reimburse members for out-of-network care. The investigation has found that, for at least the past fifteen years, Excellus has used years-old fee schedules to reimburse consumers for out-of-network claims, saving itself countless dollars which should have been paid to consumers. Because medical costs rise substantially every year, the use of old fee schedules hurts consumers by paying them substantially less than they are owed. For every year by which the fee schedule is outdated, the harm to the consumer is compounded. For many years, Excellus has relied on pricing information that was as much as nine years old. Furthermore, emails and other internal communications secured by the Attorney General’s Office during the investigation show that Excellus employees were aware of their outdated rates and did nothing to correct the problem or pay members what they were owed. “In some of the most egregious evidence of fraud we have seen in this investigation, these emails reveal that not only did Excellus use outdated UCR fee schedules, but it made zero effort to fix the problem and pay members what they deserved. The company’s own internal communications show total disregard for the effect their skewed rates were having on hard-working families, especially across Upstate New York where Excellus controls the lion’s share of the health insurance market,” said Cuomo. According to a 2007 market report by the American Medical Association, Excellus controls 57 percent of the Rochester market for commercial health insurance and 66 percent of the PPO (“preferred provider organization”) market there; 42 percent of the Syracuse market for commercial health insurance and 97 percent of the HMO (“health maintenance organization”) market there; 27 percent of the Binghamton market for commercial health insurance and 80 percent of the HMO market there; and 15 percent of the Ithaca market for commercial health insurance and 100 percent of HMO market there. The Attorney General’s industry-wide investigation into rate manipulation began in February 2008, when Cuomo announced that he had issued subpoenas to the nation’s largest health insurance companies that use the Ingenix database, including Aetna, CIGNA and WellPoint/Empire BlueCross BlueShield (NYSE: WLP). To date the investigation is ongoing. Jeff Kang, M.D., Chief Medical Officer for CIGNA, said: "CIGNA commends the Attorney General’s efforts to bring greater transparency to the pricing of health care services and we are pleased to partner in the creation of an independent not-for-profit organization to administer the new database. We recognize the Attorney General’s concern that there are inherent conflicts of interest related to the Ingenix database and expect that this new database will further enable people to make informed choices about their health care purchases.” Nancy Nielsen, M.D., President of the American Medical Association (AMA), said: “The American Medical Association commends CIGNA for committing today to the groundbreaking insurer settlements arranged by New York Attorney General Andrew Cuomo. In the wake of these agreements, the AMA calls upon all health insurers to reject the fatally flawed Ingenix database. Health insurers who truly recognize the importance of restoring their damaged relationships with patients and physicians should commit to the solution proposed by Attorney General Cuomo without delay.” Michael H. Rosenberg, MD, President of the Medical Society of the State of New York (MSSNY), said, “Attorney General Andrew Cuomo has taken another important step in propelling state and national healthcare reform and leveling the playing field with managed care organizations. Just a month after negotiating the first agreement, Attorney General Cuomo has managed to achieve what MSSNY and the AMA sought for more than eight years. With CIGNA joining United, Aetna, MVP, HealthNow and Independent Health - in abandoning the flawed Ingenix system - patients and physicians will now have the assurance of a viable and transparent reimbursement system for out-of-network services. At a time of great economic distress, this is a major step forward in the assurance of quality health care delivery.” Chuck Bell, Programs Director of Consumers Union, said: “Attorney General Cuomo's sweeping national investigation of the previously obscure Ingenix database has lifted the veil on this appalling financial rip-off, and created a new framework for a fair, consumer-friendly solution. Today's announcement shows that national insurers are coalescing behind a comprehensive, industry-wide strategy to reform the way that out-of-network charges are calculated, so consumers will be paid fairly.” The agreement announced today is the result of an investigation by Deputy Chief of the Health Care Bureau James E. Dering, Senior Trial Counsel Kathryn E. Diaz, and Assistant Attorneys General Brant Campbell and Sandra Rodriguez, under the direction of Linda A. Lacewell, the head of the Attorney General’s Healthcare Industry Taskforce. In January, Cuomo also issued a report on his investigation, “Health Care Report: The Consumer Reimbursement System is Code Blue.” The report highlights the conflicts of interest and other defects in the current system and calls for the reforms announced today. To access the report, get consumer tips for out-of-network care, or to file a complaint, please visit http://www.oag.state.ny.us.

United Health Care used a faulty method to calculate risk costs and overcharged the state nearly $4 million for insuring the New York State Health Insurance Program (NYSHIP), according to an audit released today by State Comptroller Thomas P. DiNapoli. “United Health Care overcharged the state nearly $4 million,” DiNapoli said. “These days every dime counts and $4 million is a lot of taxpayer dimes. This practice must stop.” Civil Service Commissioner Nancy G. Groenwegen said, “This Department is constantly seeking ways to reduce premium costs to the State and local NYSHIP participants, and ultimately the taxpayers. We agree with the Comptroller and have begun negotiations with United Health Care to change the way it assesses and charges for the risks it undertakes.” New York State provides health insurance coverage to active and retired state, local government and school district employees. United Health Care is responsible for administering the medical/surgical and major medical portion of the Empire Plan, the primary health plan of NYSHIP. The New York State Department of Civil Service is responsible for overseeing the program. Auditors found that United Health Care was improperly calculating the amount it charged the state for insuring the risk associated with administering the Empire Plan. It is standard industry policy for insurance companies to charge employers for the risk of insuring their employees. United Health Care calculated its risk charge using gross premium costs rather than net, or actual, premium costs. For the last 20 years United Health Care has consistently overestimated gross premium payments the state must pay to cover anticipated costs and had to return money to the state. The three other insurance providers that administer the Empire Plan use actual costs to calculate the state’s risk charge. From 2004 to 2007, United Health Care charged the state $71.6 million for the risk associating with insuring the plan, which is $3.9 million more than if it had calculated the risk charge based on actual costs. Government Accountability The Office of the State Comptroller regularly audits state agencies, public authorities and New York City agencies. Auditors ensure that programs achieve their established goals, funds are used efficiently and assets are adequately protected against fraud, waste and abuse. DiNapoli’s office completes approximately 200 state audits annually and identifies hundreds of millions in savings and fraud each year. Click below for a copy of the audit.

MVP Health Care is First Upstate, Non-Profit Insurer to Sign Agreement with Cuomo AG Also Issues Five-Day Notice to File Suit Against CDPHP for Consumer Fraud Attorney General Andrew M. Cuomo today announced the expansion of his historic reform of the nationwide healthcare reimbursement system to Upstate New York. Cuomo has reached an agreement with the Schenectady-based insurer MVP Health Care, Inc. in his ongoing drive to eliminate the defective and conflict-of-interest ridden Ingenix database and generate fair, out-of-network reimbursement rates for patients. Cuomo also announced that he has filed a five-day notice to file suit against another Upstate health insurer, Capital District Physician’s Health Plan (CDPHP), for failure to embrace these reforms. MVP, a non-profit health insurer that covers over 700,000 patients across Upstate New York and the East Coast, did not contribute data to Ingenix, but, like other insurers across the country, relied on the database to determine reimbursement rates for patients who went out of network. Despite not being a contributor, MVP has proactively agreed to embrace Cuomo’s reform efforts and end its relationship with Ingenix, becoming an industry-wide leader in the fight to ensure fair reimbursement rates for working families nationwide. “Companies like MVP that proactively embrace reform are an essential part of our continued momentum towards change that is nationwide and industry-deep,” said Attorney General Cuomo. “I commend MVP for being a true industry leader and hope that their forward-thinking actions today encourage others to follow suit. If they do not, as my notice to CDPHP today makes clear, this Office will not hesitate to bring legal action against anyone who was involved with Ingenix.” Earlier this month, Attorney General Cuomo announced sweeping reforms to end the manipulation of reimbursement rates at the expense of patients across the country. After a months-long investigation revealed that the health insurance industry relied on a faulty database to set rates, Cuomo reached groundbreaking agreements with UnitedHealth Group Inc. (NYSE: UNH), the owner of the Ingenix database and the second-largest insurer in the country, along with Aetna (NYSE: AET), the nation’s third-largest insurer. Attorney General Cuomo’s investigation concerned allegations that as a subsidiary of a major health insurer, Ingenix had a vested interest in setting rates low, so companies could underpay patients for out-of-network services. The investigation revealed that the database intentionally skewed “usual and customary” rates downward through faulty data collection, poor pooling procedures, and the lack of audits. That means many consumers were forced to pay more than they should have. The investigation found the rate of underpayment by insurers ranged from ten to twenty-eight percent for various medical services across the state. The Attorney General found that having a health insurer determine the “usual and customary” rate – a large portion of which the insurer then reimburses – creates an incentive for the insurer to manipulate the rate downward. The establishment of a new database, independently maintained by a nonprofit organization, is designed to remove this conflict of interest. In early January, Attorney General Cuomo announced the first settlement in his investigation with UnitedHealth, under which the database of billing information operated by Ingenix will close. United also agreed to pay $50 million to a qualified nonprofit organization that will establish a new, independent database to help determine fair out-of-network reimbursement rates for consumers throughout the United States. Cuomo has since reached an agreement with Aetna who will pay $20 million to the new database. Today’s agreement with MVP is the first involving a non-profit, upstate insurer and demonstrates the industry’s growing commitment to Cuomo’s reforms. Under the terms of the agreement: • MVP will cease using the Ingenix databases to calculate out-of-network reimbursement rates; • MVP will also amend their member disclosures to provide clearer information to its members about their method of determining reimbursement rates; • If MVP continues to promise its members that they will be reimbursed based on “usual and customary rates,” MVP will use the new database; • MVP will contribute $535,000 over a five-year period to help fund the new, independent database; • A nonprofit will own and operate the new database, and will be the sole arbiter and decision-maker with respect to all data contribution protocols and all other methodologies used in connection with the database; • The nonprofit will develop a website where, for the first time, consumers around the country can find out in advance how much they may be reimbursed for common out-of-network medical services in their area; • The nonprofit will make rate information from the database available to health insurers; • The nonprofit will use the new database to conduct academic research to help improve the health care system; • The nonprofit will be selected and announced at a future date Denise Gonick, MVP Health Care executive vice president and chief legal officer, said: “Like many other health insurers, MVP used the Ingenix database. We recognize the Attorney General’s concern about conflicts of interest inherent in the Ingenix database and appreciate his providing our industry with an independent process that is transparent and helps consumers make more informed health care purchasing decisions. MVP welcomes the opportunity to be the first upstate New York based health insurer to introduce this reform to our members, and believes that consumers and providers will be well-served by the joint effort that we are announcing today.” Dr. Nancy Nielsen, President of the American Medical Association, said: "We are encouraged that health insurers are stepping forward and recognizing the importance of restoring their damaged relationships with patients and physicians by committing to the creation of a new, independent database that will restore fair reimbursements. The American Medical Association commends MVP/Preferred Care for joining United Healthcare and Aetna by agreeing to the solution proposed by New York Attorney General Cuomo and calls upon other health insurers to do the same." Dr. Michael H. Rosenberg, President of the Medical Society of the State of New York, said: “Today’s announcement – that brings us another big step closer to achieving a major goal that the Medical Society of the State of New York and the American Medical Association have been working on since 2000. This agreement with MVP is particularly noteworthy because it will help to reduce the cost of out-of-network medical care for patients in this area, which has been impacted by the economic downturn. Efficient use of the healthcare dollar is particularly important to these New Yorkers today.” Chuck Bell, Programs Director for Consumers Union, said: “Attorney General Andrew Cuomo’s investigation of the health insurance industry has blown the cover on a massive, national problem in the out-of-network reimbursement system. Thanks to this investigation, we now know that many, many consumers are being grossly underpaid by their insurers when they go out of network to visit a physician or medical provider. We commend MVP Health Care for being an early leader in supporting a new independent nonprofit institute based in New York state that will collect and maintain data on out-of-network charges, and contributing half a million dollars to fund its work.” Cuomo also announced today that he has given CDPHP five-day notice of intent to sue for refusing to abandon the use of the Ingenix database and embrace reform. CDPHP is another non-profit insurer based in the Capital Region that insures 400,000 patients throughout 29 counties in New York State. The Attorney General’s five-day notice states that the Office intends to commence litigation against CDPHP in order to stop the unlawful acts and practices that they have engaged in and continue to engage in. It will also seek to obtain injunctive relief, restitution, damages, and civil penalties. The unlawful acts and practices complained of consist of engaging in repeated and persistent fraudulent, deceptive, and illegal business practices in connection with CDPHP’s continued use of the Ingenix databases for reimbursing members’ covered out-of-network services in New York State. The agreement announced today is the result of an investigation by Deputy Chief of the Health Care Bureau James E. Dering, Senior Trial Counsel Kathryn E. Diaz, and Assistant Attorneys General Brant Campbell and Sandra Rodriguez, under the direction of Linda A. Lacewell, the head of the Attorney General’s Healthcare Industry Taskforce. Earlier this month, Cuomo also issued a report on his investigation, “Health Care Report: The Consumer Reimbursement System is Code Blue.” The report highlights the conflicts of interest and other defects in the current system and calls for the reforms announced today. To access the report, get consumer tips for out-of-network care, or to file a complaint, please visit: