Cigna drops Ingenix, funds independent reimbursement database
Cigna has ceased its use of the discredited Ingenix databases and partnered with N.Y. Attorney General Andrew M. Cuomo to create an independent not-for-profit organization to administer a new database that will determine charges for covered care from doctors outside its network.

The announcement follows a string of payor fines for using Ingenix' Prevailing Health Charges System and Medical Data Research databases. An investigation by Cuomo's office found that the databases severely understated the true market rates of U.S. medical care. Ingenix's databases are used by health plans and employers to determine the reimbursement rates to members who receive physician services outside their managed care networks.

Cigna, which was recently named in class-action lawsuits over Ingenix usage by several medical associations, said it has agreed to contribute $10 million to the new not-for-profit, which will help individuals get transparent and accurate information about the costs of the care they receive. Cigna will also assist the new not-for-profit by providing it with relevant billing and claims data.

The Cigna network provides access to doctors, whether in-network or out-of-network, who have agreed to set fees for services. If an individual decides to receive care from an out-of-network doctor, then the patient is reimbursed based on a set fee (which was previously determined on the basis of Ingenix data) and the individual is responsible for the difference between the set fee and the billed charge.

The payor said that a transparent system will provide consumers with additional information to assist with their physician selection process. More than 95 percent of office visits are made to in-network physicians today, and increased transparency around physician pricing will further support efforts to drive lower cost, high quality care, Cigna said.

For example, Cigna claimed that for a 15-minute office visit in New York City, payors on average allow $74 to in-network doctors and as much as $160 using the Ingenix database to out-of-network doctors. Medicare pays $70 to in-network doctors and $77 to out-of-network doctors for the same office visit. However, on average, out-of-network physicians charge consumers $214 - for the same service, Cigna said.