While some of the largest states Florida, Texas, and California are in different levels of state regulation over balance billing, the state of New York is now weighing in with the attorney general Andrew Cuomo’s investigation and potential suit against UnitedHealth Group. United is one of the largest medical insurers and the largest in New York. Cuomo is also currently investigating Aetna, Cigna and Empire BlueCross/BlueShield.

According to a February 14 New York Times article, Mr. Cuomo believes that “there was an industrywide scheme perpetuated by some of the nation’s largest health insurers to deceive and defraud consumers.” This has resulted in patients being forced to pay more than they should when using doctors and hospitals outside of the insurer’s networks. The end result has potentially added “hundreds of millions of dollars’ to the out-of pocket medical expenses paid nationwide by insured patients.

The investigation has brought into focus issues of concern voiced by physician groups. This is occurring with insurance companies showing huge profits at the same time as an estimated 47 million people in the United States remain without health insurance. One issue Cuomo is looking at is the insurance industry’s propensity to consistently undervalue “prevailing market rates.” Cuomo feels that the insurers manipulate information to arrive at artificially low rates. The insurance companies then use these lower rates to calculate the percentage to be paid to providers which leaves a disproportionally high amount remaining to be paid by the patients.

The New York investigation is a sharp contrast to other large states where the trend has been to attempt to restrict the ability of providers to collect balances not covered by insurance companies. Florida has restricted collection from HMO patients of balances for over a decade. Non contracted providers in Florida have had to look to the insurers to attempt to collect balances with mixed results.

California’s emergency physicians have been embroiled in a fight over balance billing that is currently hanging in the balance with the Northridge Emergency Physician’s suit that will be determined in the California Supreme Court. A negative outcome could result in a state mandated “usual and customary” rate based on either Medicare or rates that are based on published data by a data collection company like Ingenix. Ironically, Ingenix is owned by United Health.

Texas Emergency Physicians have been impacted in this area by the 2007 legislative efforts at “transparency” that require both health plans and hospital based providers to provide patients with coverage, cost of services, billing policies, and payment procedure information. Physician providers must implement policies and procedures that inform patients about possible discounts, late payments, and how to file a complaint about charges for medical services. In addition, patients may request an estimate of the costs of services and how much will be owed out of pocket that is due with 10 days of the request. Bills from emergency physicians must include statements about lack of participation in the patient’s health plan, billing contact information, and information about filing complaints with the Texas Medical Board.

The Texas transparency law has made an attempt at looking at both the Insurers and Providers billing policies with the focus on Emergency services. The assumption by the medical community is that balance billing will be addressed again by the 2009 legislature.

It would be interesting to see if the New York investigations and potential lawsuits that will bring public focus on the abuses of insurance companies will have any impact on the state legislatures as they continue to address the balance billing issues in the future. We can only hope that the state legislators will have a balanced perspective when they make decisions on balanced billing.