In hopes of lowering health care costs, a Syracuse University-led research team will construct a database that will catalog health care rates and create a Web site for consumers to check the rates, New York State Attorney General Andrew Cuomo announced Tuesday in the Maxwell School of Citizenship and Public Affairs.

The database will decide how much a health care company should provide to consumers who use an out-of-network plan. Consumers who use an out-of-network plan see doctors of their choice but receive only a percentage of the doctor’s costs. Seventy percent of insured Americans use this type of plan, Cuomo said.

Health care providers had used their own company, Ingenix, to calculate what percentage they would give to consumers using an out-of-network plan. Cuomo’s office sued health care providers when it discovered the providers all used Ingenix and were allegedly not paying consumers the correct amount.

‘It seems like we started this 100 years ago, but that’s not mathematically possible. This is the most exhausting case that my office did and the most productive,’ Cuomo said to a crowd of both Syracuse and state Democrats in Maxwell Tuesday.

The health care companies settled the lawsuit, agreeing to disband Ingenix and provide $100 million to construct the new database and nonprofit organization that will oversee it, FAIR Health.

Cuomo hopes the new database will be operational within a year. The database will ensure that consumers receive the right amount for a procedure and fix the errors from the Ingenix system, he said.

‘It will, in our opinion, correct this problem, this injustice, this fraud that has gone on for years, costing what I believe to be hundreds of millions of dollars,’ he said. ‘I believe these health insurance companies have unjustly earned hundreds of millions of dollars by under reimbursing consumers.’

Deborah Freund, a public administration professor at SU and a senior associate at SU’s Center for Policy Research, will lead the team that will construct the database. SU was chosen to lead the project because it had many qualified researchers on campus already, Freund said. The research team will also have professors from Cornell University, the University of Rochester, Upstate University Health System and State University of New York University at Buffalo.

The group will study how much the insurance providers should reimburse consumers by procedure. It will also record how the reimbursement may vary by state, Freund said.

At the very least, Freund said, consumers will be better informed. But since Ingenix was neither transparent nor objective in its rate calculations, it will possibly result in increased health care savings, she said.

When the database is complete, a Web site will be created 90 days later. SU’s School of Information Studies will design the Web site, Freund said.

The Web site will make the rate system much more transparent and allow consumers to know going into the procedure how much they can expect from their insurer, Cuomo said.

‘It will have a Web site where, for the first time ever, the consumer will be able to know and the doctor will be able to know what the reimbursement rate is,’ he said. ‘Before you leave your house, you’ll be able to look up the exact procedure you’re going to have, you’ll know what the cost is and when you go to the doctor’s office. There will be no surprises for you or the doctor.’

adbrow03@syr.edu

Published on October 27, 2009 at 12:00 pm