UnitedHealth settles lawsuit

Managed-care company UnitedHealth Group Inc. said Thursday that it would pay $350 million to settle a lawsuit over out-of-network medical claims. The deal comes two days after the insurer pledged $50 million to set up a new database to determine payments for those claims.

Another health insurer, Aetna Inc. of Hartford, Conn., agreed Thursday to pay $20 million toward the creation of that database.

Both the lawsuit settlement and the new database center on much-criticized databases operated by UnitedHealth subsidiary Ingenix Inc.

Insurers contribute claims information to the Ingenix databases, and then use those numbers to determine their “usual and customary” payment rates for care that patients seek outside their insurance network.

But the class-action lawsuit alleged insurers lowered the data they contributed, which then helped them lower their payment obligations. Doctors or other providers often billed patients for the difference.

Plaintiffs in the case, which dates to 2000, included the American Medical Assn. and healthcare providers.

“This is a situation where there was a rigged scheme to shift costs that were promised to be paid by an insurer to the patients themselves,” said Dr. Nancy Nielsen, president of the medical association.

UnitedHealth said in a statement that it admitted no wrongdoing but believed that it was in the company’s best interest to move forward. The $350 million it agreed to pay will fund a settlement for health plan members and care providers in connection with claims dating to 1994.

A separate investigation by the New York attorney general’s office found that insurers using Ingenix figures underpaid by 10% to 28% for certain out-of-network claims in that state.