Cuomo Expands Probe of Health Insurers
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ALBANY — Attorney General Cuomo said today that he issued new subpoenas to Aetna Inc., Cigna Corp., UnitedHealth Group Inc., WellPoint Inc., and other health insurers in a broadening investigation of possible fraud costing consumers hundreds of millions of dollars.
Mr. Cuomo is also looking to subpoena testimony from the chief executive officers of those companies as well as executives of Empire Blue Cross Blue Shield, Excellus, and the combined Group Health Inc. and HIP Health Plan.
“The CEOs are responsible for their corporations and these actions had a significant impact on families all across the state,” Mr. Cuomo said.
Mr. Cuomo is seeking all e-mail correspondence involving the companies’ CEOs, chief operating officers, chief fiscal officers, presidents, and employees supervising claims. He also wants any records that might question the accuracy of reimbursements that he feels are too low.
Mr. Cuomo believes the companies used the UnitedHealth Group-owned firm Ingenix to set rates, which resulted in consumers reimbursed at unfair and unjustified low rates. Low reimbursements mean higher out-of-pocket costs for consumers when they choose or need physicians outside their health plans.
“Ingenix is a wholly owned subsidiary of the industry and the company is determining the rates that the insurance companies use to reimburse consumers,” Mr. Cuomo said.
Spokesmen for GHI-HIP, Cigna, Independent Health, Excellus, and BlueCross BlueShield declined to comment on Mr. Cuomo’s claims except to say the companies are cooperating with the attorney general.
There was no immediate comment from Aetna, UnitedHealth, or WellPoint. There was also no comment from a group of New York HMOs subpoenaed by Mr. Cuomo. They include the Capital District Physicians Health Plan, Health Now New York Inc., and MVP Preferred Care.
“I believe consumers have been defrauded,” Mr. Cuomo said. “I believe the companies have been allowed to do it nationwide. I believe there is a certain corporate arrogance to these companies.”
He said the companies, which face less competition and record profits after a series of mergers, aren’t fulfilling their commitment to pay fair reimbursements.
The new subpoenas come in a case first announced in February. It relies on the state’s powerful Martin Act, which provides criminal and civil enforcement powers for publicly traded companies. Mr. Mr. Cuomo is basing the other subpoenas on state consumer fraud laws.
He is also seeking to compel the testimony of CEOs to determine if the companies knew they were relying on artificially low reimbursement rates for customers and if the companies’ investors knew of the practices.
Mr. Cuomo filed a notice in February he intended to sue Ingenix, but hasn’t yet. He said negotiations with the company continue and the notice allows him to file the civil suit without further notice.
“We’ve been in discussions with him all along and continue to cooperate with the attorney general,” Joan Schimml of Ingenix said.