Cuomo expands probe of some of nation's biggest health insurers

By The Associated Press

Friday, March 7, 2008 9:38 AM EST

ALBANY - New York Attorney General Andrew Cuomo said Thursday that he issued new subpoenas to Aetna Inc., Cigna Corp., UnitedHealth Group Inc., WellPoint Inc. and other health insurers in a broadening investigation of possible fraud costing consumers hundreds of millions of dollars.
Cuomo is also looking to subpoena testimony from the CEOs of those companies as well as executives of Empire Blue Cross Blue Shield, Excellus, and the combined Group Health Inc. and HIP Health Plan.

“The CEOs are responsible for their corporations and these actions had a significant impact on families all across the state,” Cuomo told The Associated Press.

Cuomo is seeking all e-mail correspondence involving the companies' CEOs, chief operating officers, chief fiscal officers, presidents and employees supervising claims.

He also wants any records that might question the accuracy of reimbursements that he feels are too low.

Cuomo believes the companies used the UnitedHealth Group-owned firm Ingenix to set rates, which resulted in consumers reimbursed at unfair and unjustified low rates. Low reimbursements mean higher out-of-pocket costs for consumers when they choose or need physicians outside their health plans.

“Ingenix is a wholly owned subsidiary of the industry and the company is determining the rates that the insurance companies use to reimburse consumers,” Cuomo said.

Spokesmen for GHI-HIP, Cigna, Independent Health, Excellus and BlueCross BlueShield declined to comment on Cuomo's claims except to say the companies are cooperating with the attorney general.

There was no immediate comment from Aetna, UnitedHealth or WellPoint. There was also no comment from a group of New York HMOs subpoenaed by Cuomo. They include the Capital District Physicians Health Plan; Health Now New York Inc.; and MVP Preferred Care.

“I believe consumers have been defrauded,” Cuomo said. “I believe the companies have been allowed to do it nationwide. I believe there is a certain corporate arrogance to these companies.”

He said the companies, which face less competition and record profits after a series of mergers, aren't fulfilling their commitment to pay fair reimbursements.

The new subpoenas come in a case first announced in February. It relies on the state's powerful Martin Act, which provides criminal and civil enforcement powers for publicly traded companies. Cuomo is basing the other subpoenas on state consumer fraud laws.

He is also seeking to compel the testimony of CEOs to determine if the companies knew they were relying on artificially low reimbursement rates for customers and if the companies' investors knew of the practices.

Cuomo filed a notice in February he intended to sue Ingenix, but hasn't yet. He said negotiations with the company continue and the notice allows him to file the civil suit without further notice.

“We've been in discussions with him all along and continue to cooperate with the attorney general,” said Joan Schimml of Ingenix.

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Franrose_O wrote on Dec 15, 2008 2:54 AM:

" Sudden expenses are always present in our lives. Some people are fortunate enough to look into options like payday loans. It is a fact of life that some are far better off than the majority, but there is a more disturbing fact that is becoming more and more evident every day. It seems the super wealthy seem to think that the rules don't apply to them, and some of them seem to think that they should be allowed to get away with it. Recently, the investment giant Merrill Lynch had to be sold to Bank of America to avoid bankruptcy in the wake of the subprime mortgage collapse. An article in the Wall Street Journal reports that Merrill Lynch CEO, John Thain, has asked for a $10 million dollar bonus for the year, after he had to sell the company to Bank of America to avoid bankrupting it. His rationale is that his actions led to the company not going bankrupt, and therefore he deserves a bonus. The Attorney General of New York State, Andrew Cuomo, termed his request as "nothing less than shocking," as it seems callous to even ask for a bonus of that size when his company is barely able to stay afloat. Now here is the funny thing – any other ordinary company employee, if they failed to make money for the company they worked for, or failed to complete the tasks set them, they get reprimanded or fired. Perhaps those at the top of the ladder don't think that the same rules apply that apply at the bottom, and perhaps they should. However, the rest of us don't have to sell ourselves to Bank of America if we have a financial crisis suddenly – we have options, such as payday loans. Click to read more on Payday Loans. "

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