Minnesota-based UnitedHealth Group Inc. on Tuesday agreed to pay $50 million to establish a new database that will be used to determine rates for patients who choose physicians outside the insurance giant’s network. The new organization will also have to give patients details about medical costs. Patients can benefit from discounts if they find a doctor within the network.

 

“For the past 10 years, American patients have suffered from unfair reimbursements for critical medical services due to a conflict-ridden system that has been owned, operated and manipulated by the health insurance industry,” Attorney General Andrew Cuomo said in a press release. “This agreement marks the end of a flawed system.”

 

In February, Cuomo began an industrywide probe into health care reimbursements after complaints that Ingenix-produced numbers for out-of-network expenses were far lower than what doctors were charging. He found that some companies had shortchanged payments to customers for at least a decade.

 

Under the agreement, Ingenix will close and the $50 million will help create a nonprofit, independent billing agency. Officials hope this non-profit entity will resolve any questions about the independence of the database.

 

Earlier this year, the California Supreme Court barred emergency room doctors from billing insured patients when their health plans refuse to pay. The decision has broad implications for health care consumers, as it provides strong support to patients’ advocates who claim that emergency room doctors and hospitals are putting patients in the middle of the dispute with health maintenance organizations, or HMOs. They say that billing disputes should not affect patients, they must be resolved solely between the emergency room doctors and hospitals, and the HMO.