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AMA to Senate: Make Health Insurer Payments More Transparent

Hold insurers accountable for their payment responsibility to patients and physicians

For immediate release:
March 26, 2009

WASHINGTON, D.C. – On the heels of recent legal settlements with insurers for underpayment of out-of-network care, the American Medical Association testified today to the Senate Committee on Commerce, Science and Transportation on the need for increased insurer payment transparency. Congress can help restore reasonable compensation for the patients and physicians who were shortchanged by insurers, and promote fair and accurate payments going forward.

“We encourage Congress to pursue increased transparency of all health insurer payments to improve efficiencies and savings throughout the health system,” said AMA President Nancy H. Nielsen, MD. “Making the insurance payment system more transparent will help keep the patient-physician relationship intact, as it can be threatened if patients perceive that their physician is overcharging for services when in reality the insurer is underpaying.”

For more than a decade insurers have used a flawed database, called Ingenix, to determine the usual and customary fees that many insurers paid for medical services provided out-of-network. Ultimately, UnitedHealth Group recognized the importance of restoring its relationship with patients and physicians and is settling its court battle regarding the use of this database with the AMA. As a result of the AMA lawsuit and the recent agreements between New York Attorney General Cuomo and several insurers, the problems with the database have been eradicated and a major step has been taken toward improving the health insurance payment system.

“Congress can increase transparency by adopting additional standards to govern payment policies and more strictly enforce existing standards,” said Dr. Nielsen. “The AMA is pleased to work with Congress to ensure accurate and transparent health insurance payments for the nation’s patients and physicians.”

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Lisa Lecas
American Medical Association
(312) 464-5980