Health insurers probed over reimbursement

New York Attorney General Andrew Cuomo said on Wednesday he is conducting an industry-wide probe of health insurers into an alleged scheme to defraud consumers by manipulating reimbursement rates.

Cuomo said he intends to sue UnitedHealth Group Inc (UNH.N) and four of its subsidiaries, including Ingenix Inc, the nation's largest provider of health care billing information.

The attorney general also issued 16 subpoenas to the largest U.S. health insurance companies, including Aetna Inc (AET.N), Cigna Corp (CI.N) and Empire Blue Cross Blue Shield, a unit of WellPoint Inc (WLP.N).

If I recall correctly United Health Group signed an agreement to acquire Sierra Health Services Inc.which provided health benefits and services to Nevadans and amazingly the Nevada Insurance Commission approved the purchase leaving Nevadans with only a few health care providers and giving United Health Group as much as 80 percent of the Nevada market.

At the time Forrest Burke, of United Health, said there would be no increase in rates and that reimbursement and other factors would be unaffected. (Nevada Appeal)

However, it is reimbursement that United Health is now being investigated for. Kind of makes it easy to set rates when there is no competition thanks to our ever watchful Nevada politicians.

For those who hate Governor Gibbons almost as much as Bush, there is one thing he may be getting right:

On November 9, 2007, Governor Gibbons sent a letter to the U.S. Department of Justice requesting that they seek a final and accurate determination, within their jurisdiction, of what this merger would mean to healthcare access and availability in Nevada.

"A merger of this magnitude could prove to be less than advantageous to Nevada consumers due to the overwhelming HMO and Medicare market share the UnitedHealth Group will control in our state," Governor Gibbons concluded.

He got one right. Read the Governor's office complete press release here.