Usual and Customary

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New York State Attorney General Andrew Cuomo has filed a lawsuit against UnitedHealth Group, as well as subpoenaed the other major insurers in the Empire State regarding pricing practices. When an insured person goes to a health care provider outside of his or her network, reimbursement is based on what are called "usual and customary" rates. Well, there is an obvious conflict of interest if the company that calculates those figures is owned by UnitedHealth.

From the New York Times -

"Citing an example of what he said was a pattern of underpaying for care, Mr. Cuomo said his office had compared the prevailing market rate for a doctor visit to the amount Ingenix had calculated as usual and customary. While doctors in the metropolitan New York City area typically charged $200 for an office visit, he said, Ingenix calculated the rate at only $77. Under a typical plan, the insurer would pay 8o percent of the $77, or only $62. The patient was responsible for covering the remaining $138 balance."

This is a very good reason to get to know the details of your health insurance plane. Once you have an emergency, it's often too late to figure it out until after the bill arrives. That is one of the reasons consumer-directed health plans are effective. They get people thinking about these potential problems before they occur.