N.Y. launches new reimbursement system for out-of-network healthcare charges

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N.Y. Attorney General (AG) Andrew Cuomo Tuesday announced a reform plan for the consumer reimbursement system for out-of-network healthcare charges for the state of New York, which will be funded with almost $100 million in legal settlement proceeds from private health insurers.

A new not-for-profit company, FAIR Health, and a research network headquartered at Syracuse University will develop a new independent database for consumer reimbursement and a new Web site where for the first time consumers can compare prices before they choose their doctors.

In addition to Syracuse University, the research network consists of the State University of New York (SUNY) at Buffalo, Cornell University, University of Rochester and SUNY Upstate Medical University. The new database will allow FAIR Health to conduct healthcare research and for continued healthcare reform within the state.

According to the AG's office, the plan arose from its investigation into how the health insurance industry reimburses consumers for out-of-network healthcare charges. “The investigation uncovered a fraudulent and conflict-of-interest ridden reimbursement system affecting millions of patients and their families and costing Americans hundreds of millions of dollars in unexpected and unjust medical costs,” the AG's office stated.

The research for the new database will be centered at Syracuse University’s Maxwell School, a public affairs school which includes health policy, and the School of Information Studies. The research project will be led by Deborah A. Freund, PhD professor of public administration at Syracuse.