Cigna and Aetna face suit over payments

The American Medical Association is joining several state associations in suing health insurers Cigna Corp., of Philadelphia, and Aetna Inc. over a database they say was rigged to underpay doctors on out-of-network claims for more than a decade.

Doctors want compensation for the time they wasted asking the insurers for more money and for income they lost because of the low payments and the inability of patients to pay their share of the bills, said Lawrence Downs, general counsel for the Medical Society of New Jersey, one of the groups participating in the suit.

Patients who use doctors who are not in their insurance company's network typically are expected to pay whatever the insurer doesn't. Downs said Cigna and Aetna set their payments too low, leaving patients with a bigger share of the bill.

But Cigna yesterday said the rates doctors charge were part of the problem.

The lawsuits heap more criticism on data from Ingenix Inc. that already has cost Minnetonka, Minn.-based UnitedHealth Group Inc. $350 million to settle a separate lawsuit involving the AMA.

Ingenix, a UnitedHealth subsidiary, also has drawn the ire of New York Attorney General Andrew Cuomo, who said last month that poor reimbursement by insurers, thanks to flawed Ingenix data, has led to higher medical bills for consumers.

Insurers use the data to determine "usual and customary rates" for care received outside their networks.

Last month, UnitedHealth agreed to close the databases and help fund the creation of a new one after Cuomo found that insurers using them underpaid from 10 percent to 28 percent for certain claims in New York State.

The AMA cited, as an example, an unnamed doctor who performed a 2003 breast reconstruction surgery. It said Cigna paid him $10,000 - or $7,000 below his billed charges - due to its "usual and customary" rate calculation and the fact that multiple surgeries were performed.

Aetna spokeswoman Cynthia Michener said the lawsuits are similar to claims already filed by consumers in state courts in New Jersey and Connecticut.

"We're disappointed the medical community has chosen to litigate on top of already pending consumer litigation on the same topic," she said.

Cigna said in a statement that its payments to out-of-network doctors are "robust and fair."

It noted that doctors in the New York City market charge on average $214 for a 15-minute, out-of-network office visit. Health plans, in turn, reimburse as much as $160 using the Ingenix database. Medicare pays doctors $77 for the same visit.