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Judge Gives Preliminary OK on Ingenix Settlement

December 7, 2009
Related Topics: Medical Benefits Law, Benefit Design and Communication, Ethics, Latest News
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A federal judge in New York has granted preliminary approval to a $350 million settlement agreement ending a class-action lawsuit against UnitedHealth Group brought by the American Medical Association and other plaintiffs involving UnitedHealth subsidiary Ingenix.

The settlement agreement was publicized in January on the heels of an announcement by New York Attorney General Andrew Cuomo that his office had secured a deal with Ingenix to pull the plug on in its databases of physician billing data widely used by health plans to calculate out-of-network reimbursement.

Physicians and consumers alleged that the products were used as a means to justify paying physicians much less than they billed, leaving patients unexpectedly on the hook for the balance.

The AMA heralded McKenna’s decision. Since January, however, one of the law firms involved in the case has been saying that settlement amount was far too low.

Wilentz Goldman & Spitzer argued that the difference between what doctors billed and what insurers paid was significantly higher than the proponents of the settlement calculated. Wilentz, after several revisions, arrived at $26.4 billion, rather than $4.3 billion.

U.S. District Judge Lawrence McKenna wrote that he was not convinced by the “voluminous submissions and oral presentations” and added that the figure, whatever the correct one is, doesn’t dictate an appropriate settlement amount.

McKenna also wrote that the settlement should be balanced against the plaintiffs’ chances of winning in court, and the task of proving that the Ingenix data was in fact flawed would be “a quite difficult and time-consuming one.”

Filed by Gregg Blesch of Modern Healthcare, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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