It looks like UnitedHealth Group’s trials have just begun. Shortly after NY attorney-general, Andrew Cuomo, announced that UHG’s subsidiary, Ingenix, a database-vendor, was happy to pay him $50 million to get off their case, the American Medical Association announced a class-action settlement of $350 million over the same issue: Ingenix’ database of “usual & customary” charges, used to calculate payment when patients go to out-of-network doctors for treatment. According to the Wall Street Journal, UHG claims the money will go to physicians and patients. Yeah, we’ll see what the AMA’s tort lawyers have to say about that!
The AMA is an interesting business. It reported revenues of $290 million in 2007, but only $45 million was membership dues (a drop from 2006). $223 million was revenue from publishing. Most people probably think of the AMA’s journals, especially JAMA, but the AMA also sells products relevant to the Current Procedural Terminology (“CPT”, copyright AMA). CPTs are codes for medical procedures, developed by the AMA but used for Medicare and all state Medicaid billing. That’s right: the AMA is a monopoly-supplier of claims-submission standards for government-run health-care plans. Unfortunately, business is declining: profits dropped from 2003 through 2007.
So, one monopolistic (non-profit) supplier of critical information for medical reimbursement sues another monopolistic (for-profit) supplier of critical information for medical reimbursement and settles for $350 million.
Look, I don’t really want to take anybody’s side here, but like I’ve said before: the solution to the medical payment mess is not class-action lawsuits – it’s getting health-care dollars back into the hands of patients, to pay for care at prices they and their doctors mutually agree.