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Wrangling Over 'Reasonable' Fees

It's a no-holds-barred battle between health insurers and hospitals, with customers caught in the middle
Wrangling Over 'Reasonable' Fees
Barry Falls

A new and fearsome player has joined the long-simmering battle between insurers and health-care providers over how much should be paid for medical procedures. New York Attorney General Andrew Cuomo announced on Feb. 13 that a six-month investigation by his office found the nation's biggest health insurers have systematically defrauded consumers in the state by setting their reimbursement rates for out-of-network care artificially low. He has issued subpoenas to 16 insurers and intends to sue industry giant UnitedHealth Group (UNH).

But while Cuomo's probe centers on Ingenix (UNH), a unit of UnitedHealth that is the nation's largest provider of health-care billing information, experts say reimbursement problems plague the entire industry. "We have price anarchy in health care," says Alan Sager, professor of health policy at Boston University's School of Public Health. "Cuomo flipped over one log in the forest."