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HealthNet Algorithms – When Do they Prevent Fraud and When Do They Cross the Line and Not Pay Out – Court Case Where the MDs Win

Posted Dec 07 2009 6:00pm
This is a good example with the lawsuit in New Jersey that specifically talks about out of network charges.  This has been a hot topic for years and this medical group was charged with “fraud”, mainly because it appeared to be out of network.  It may be out of network, but how could the insurer claim this as fraud.  Ok let’s step back in time for a moment here, don’t we have some currently mentioned lawsuits ongoing about this “out of network customary charges”, like all over the US and an 8-9 battle with the AMA just approaching settlement? 

It was just in June of this year that Health Net stated they would quit using the “unfair or corrupt” data base and a non profit organization was going to replace this after being out there in use for 8-9 years.  Just a question in light of all of this, how does Health Net have a leg to stand on when alleging fraud? 

Health Net Agrees to Stop Using Ingenix Database for Calculating Reasonable and Customary Fees

I can understand trying to keep costs down and use those in network first by all means as I think almost everyone understands that concept, but when that care is not available in network, the next choice is out of network. 

It’s the algorithms that can be interpreted as fraud even though none has taken place.  Here’s a story from the San Diego area which is still legal work in progress, but as it is reported now, 20 dermatology offices within 5 days stopped getting payments from all of their insurers.  They were “scored” and it was determined there was potential fraud.  This case as it states was lead by the algorithms provided by Ingenix.  The doctor’s offices had no prior notice other than the fact they were accused of “fraud”.  Is it fraud or the algorithms and how were they set to analyze with what parameters?  Algorithms can be changed quickly too, ask anyone who works on Wall Street with their “algos”. 

Skins game With Dermatology Offices in California – All Insurance Carriers Quit Paying For Treatment Within a 5 Day Period

A couple more thoughts of my own here, we certify and charge EHR vendors for the assurance that their algorithms and formulas will operate and integrate correctly, but do we as insurers for the same?  Could stand to be a hot topic here.

“Department of Algorithms – Do We Need One of These to Regulate Upcoming Laws?

Ingenix Data Base Has Some Long Reaching Legal Tentacles with Aetna, Blue Cross, Blue Shield, Humana

One other item that perplexes me a bit too is that with all the above said, why do we give contracts to the same folks that use algorithms and contributed to a data base that unfairly paid out of network charges?  Can we trust companies like this?  It’s strange they get in trouble with shorting MDs and collecting more from patients than is really customary, and yet we see their services enrolled by governments and hospitals?

Sutter Hospitals and Ingenix working together on business intelligence

State of Washington awards contract to Ingenix (subsidiary of United Healthcare)

Is there not anyone else out there who has developed this type of technology we can do business with that can help to prevent fraud that doesn’t have a track record of ripping off patients and doctors?  Sure nobody likes fraud and if you are going to be the good guy that prevents fraud I would think you might want to have your own back yard cleaned up first. 

Is This a Case for a New Law – Illegal Algorithms? How Do You Sleep at Night Rockefeller asked the CEO of United Health Care

This whole item of healthcare reform is full of stuff like this.  We all took different paths to get to where we are today and once we fully understand the value of investing in the people of the US and stop all this “passing judgment” on why they have health issues, I think we stand to make progress, but again not as long as this current system of having to constantly rate and pass judgment on each other is alive and well and all about making a buck off our illnesses.  BD

A New Jersey appeals court ruling is good news for the viability of ambulatory surgery centers in the state and reinforces physicians' rights to do what's best for their patients, according to the state's medical community.image

On Nov. 17, the Appellate Division rejected claims by Health Net of New Jersey that physician owners of an ASC committed fraud by billing for improper referrals to their out-of-network facility. The doctors themselves were in the health plan's network.

In addition, the appeals court rejected Health Net's assertions that Wayne (N.J.) Surgical Center engaged in fraud when it waived patients' coinsurance payments so they would use the facility. Health Net alleged that the doctors misrepresented their charges because they failed to disclose the fact that they had waived the fees when submitting claims.

Insurers often punish doctors and patients for using out-of-network services, said John D. Fanburg, counsel to the New Jersey Assn. of Ambulatory Surgery Centers. The organization was not directly involved in the case, but it is helping its members fend off similar suits by other insurers.

"Ultimately it's the patients' choice, and they should decide where they want to go, especially if insurance companies are charging them a higher premium for that [out-of-network] benefit," said Fanburg, chair of the health law practice at Brach Eichler LLC in Roseland, N.J.

But health plans contend that such practices drive up health care costs and ultimately hurt patient care. Health Net sought to recover $5 million in alleged fraudulent overpayments to Wayne Surgical Center.

amednews: N.J. surgery center wins ruling in health plan fraud case :: Dec. 7, 2009 ... American Medical News

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