Anti-Trust Exemption Gone for Medical Insurance Companies
Posted on Sat, Jun 19, 2010
Since 1945, the medical insurance industry has been exempt from the anti-trust laws that were passed. Anti-trust laws are applicable to almost every single industry. On February 24, 2010, the Health Insurance Industry Fair Competition Act was voted on, and the results were 406-19, which made the act pass that will expose medical insurers to the anti-trust laws.
Medical insurance companies say that the law is not needed for their industry. But an incident that happened in New York shows that it is absolutely needed. The incident involved the terminology found in many medical insurance plans: "usual and customary". Basically, this means that the insurer will pay a fee that is typically charged by a particular physician for a particular procedure, OR the fee that is usual for a particular procedure which is charged by the majority of doctors with similar training and experience within the same geographic area, whichever is LESS.
The Attorney General in New York looked into who was behind the figures that made up "usual and customary". It turns out that the figures came from a database called Ingenix, which is one of UnitedHealth UNH's subsidiaries. This database purposely skewed the rates down via data collection that was faulty, bad pooling processes, and with the absence of audits. Medical insurers would then use this faulty low rates for their reimbursements.