Ingenix, a unit of UnitedHealthcare, has settled a fraud case filed last year by New York attorney general Andrew Cuomo that has repercussions across the medical industry and should ripple across technology as well.
Cuomo had charged Ingenix with posting phony rates in its database, so that a $100 office visit might be reimbursed as a $72 visit, leaving the patient with a bill for the remainder.
The case started in 2006 when Columbia lecturer Mary Jerome complained she was left with tens of thousands of dollars in bills for ovarian cancer treatment, despite having full insurance.
Under the settlement, estimated at $50 million, UnitedHealth will create a new database on out-of-network rates, which Cuomo wants based in New York. Ingenix is based in Minnesota.
UPDATE: Add another $450 million to AMA doctors, and $20 million from Aetna to fund a non-profit alternative to Ingenix.
Investors are shrugging off the news. UnitedHealth is currently trading very near the level it was at when the case was first filed, despite the Wall Street crash which came in the interim.
Critics will say that, since UnitedHealth may have made more than $50 million from the fraud it is getting off lightly.
But Cuomo also promised to go after every insurer using Ingenix, and the result could decimate the unit. This just as it was trying to launch a consulting arm trading on its good name. At minimum it may have to be spun-out.
But there is another issue here, a tech issue. That is the need to regularly audit key databases, and the increasing risks companies run for relying upon them.
We're talking here about more than security audits here, but audits of the accuracy of information a database contains.
Th problem is especially acute for databases that include value judgements, like quality of care. Doctors as well as patients are going to be heading to court far more often, challenging medical databases.
So the questions:
- How, and how often, should these databases be audited?
- How transparent should the data be?
- When should doctors or patients be notified about changes in database entries concerning them?
Potentially a giant new industry in database content auditing is about to spring up. Law students might want to take a few database management courses if they want to make the big bucks.