Wellpoint Agrees to End Use of Ingenix Database

Wellpoint has agreed to end use of a database to determine reimbursement rates for out-of-network medical services that has led to underpayments to physicians and hospitals. Health insurers pay for a certain percentage of the usual and customary rates for services provided by out-of-network doctors, based on an estimate of the cost for such procedures in the same geographic area. Ingenix, a subsidiary of UnitedHealth Group, operates the Prevailing Healthcare Charges System, a database most health insurers use to determine the usual and customary rates. The database contains information on more than one billion claims from more than 100 health insurers. Health insurers compare out-of-network claims with those found in the database and reduce the claim to a "reasonable" amount before they reimburse health care providers or members. Under the agreement, WellPoint will end use of the database and pay $10 million to help finance the development of a new independent database administered by a not-for-profit group.