Can Transparency into Healthcare Pricing Make A Difference? NY Attorney General Cuomo Announces New Fee Database

One argument in the discussions about healthcare and health insurance reform is that more transparency into how services are priced and claims are paid will make the process more understandable, fair and effective.It seems a worthy goal, although the extent to which more visibility into pricing actually will help consumers obtain and afford the right kind of medical care remains to be seen. Regardless, an effort to provide more transparency into the health insurance claims process was unveiled in New York this week, as New York Attorney General Andrew Cuomo announced FAIR Health, Inc., a new not-for-profit company and research network headquartered at Syracuse University. FAIR (Fair and Independent Research) Health will develop an independent database for consumer health insurance claims reimbursement, as well as a Web site where consumers can compare prices before they choose doctors or treatment.

FAIR Health is funded with almost $100 million that came out of a settlement Cuomo reached over the past year with more than a dozen insurance companies, including Aetna, Cigna and WellPoint, regarding a database run by UnitedHealth Group to assist in the adjudication and payment of out-of-network claims. Cuomo's investigation found that the database's determination of "reasonable and customary" payments might have been unfairly low in many cases. As part of the settlement Cuomo reached with UnitedHealth almost one year ago, the insurer agreed to stop operating the database as soon as a new database could be created.

"FAIR Health and the upstate research network headquartered at Syracuse University will bring much-needed transparency, accountability and fairness to a broken consumer reimbursement system we have called Code Blue," said Attorney General Cuomo, in a statement. "By transforming this system for consumers nationwide, New York proves its reputation as a reform leader for the nation. By spending almost $100 million in settlement proceeds from health insurers, this initiative will also create new jobs and contribute to the development of the upstate economy which is vital to New York." According to a statement from Nancy Ann DeParle, Director of the White House Office of Health Reform, "We applaud the steps taken by Attorney General Cuomo and the state of New York to give consumers the ability to make informed decisions when purchasing health insurance."

These were some of the milder statements made by Cuomo and DeParle, who, along with Senator John D. (Jay) Rockefeller IV, Chairman of the U.S. Senate Committee on Commerce, Science and Transportation, used the announcement as an opportunity to further trash the health insurance industry. That's not surprising as the debate over healthcare continues to descend into name calling -- among all participants -- rather than open-minded and objective discussion about meaningful ways to expand health insurance coverage and to contain healthcare (and, as an extension, insurance) costs. While a valid case can be made that there are health insurance practices that merit scrutiny and possibly change, reflexively portraying the industry as villainous diverts analysis of what could actually be a positive initiative for improving the system.

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio