Health Care Provider Reimbursement: A Better Way to Determine What's Fair?

A new method for determining how much consumers are reimbursed for treatments and services by out-of-network providers (hospitals, physicians and others) is now being put into effect, changing how the health care insurance industry handles these expenses. Although the change is intended to ensure that these reimbursements are "fair" to health care consumers implications of this move may prove to be inflationary to the sponsors of multiemployer health funds. This article will address the immediate practical implications to plan sponsors as well as the potential long-term consequences to insured and self-insured health plans. Following an investigation and settlement spearheaded by New York State Attorney General Andrew Cuomo, Ingenix is being replaced by a new not-for-profit organization, FAIR Health Inc. FAIR Health will develop an independent database that will be used to determine industry standards for usual and customary rates for out-of-network provider payments. While the creation of FAIR Health may be a step in the right direction, it is unclear what the cost impact will be for plan sponsors.