Hooper, Lundy & Bookman Files Nationwide Class Action Against Ingenix: Challenges Database Used To Pay ASC Non-Contracted Claims

(Los Angeles)—On behalf of Ambulatory Surgery Centers (ASCs) across the country, Hooper, Lundy and Bookman, Inc. (HLB) today filed a national class action complaint, challenging UnitedHealth Group, Inc. and other health plans’ misuse of the Ingenix, Inc. database, to knowingly underpay ASCs by millions of dollars over the years (Case No. CV09-0547-GW (PLA)).

“For many years, United and other payors have systematically underpaid ASCs. We believe that the flawed data in the Ingenix database, and the payors’ improper manipulations of that data, are major causes of the unreasonably low amounts of reimbursement to ASCs,” said Plaintiff Co-counsel Daron Tooch.

ASCs are health care facilities that provide outpatient surgical procedures such as orthopedic, podiatry, endoscopy, ophthalmology and oral surgery. Insurers and health plans throughout the country use the Ingenix database to determine the usual and customary rate (UCR) to pay ASCs that are not part of their network. This case specifically targets Ingenix’s flawed reimbursement calculations for ASCs that do not have contracts with health plans.

“The misuse of the Ingenix database to pay physician claims has been the subject of investigations by Congress. We believe that the conflict of interest issues and problems with the database identified in those investigations apply equally to the calculation and payment of ASC claims,” said Plaintiff Co-counsel Glenn Solomon.

The class action complaint specifically charges that Ingenix and UnitedHealth have:

• Violated the Employee Retirement Income Security Act (ERISA) through their failure and refusal to fairly and appropriately compensate ASCs for their services.
• Violated the Racketeer Influenced and Corrupt Organizations Act (RICO) in that they have committed mail fraud and wire fraud by sending false and misleading information in connection with their scheme to underpay ASCs.
• Violated the Sherman Act by price-fixing with regard to the reasonable and customary rates of nonparticipating ASCs.
• Violated California’s Business and Professions Code by engaging in unfair, unlawful and fraudulent business acts and practices.

The class action complaint outlines numerous flaws in the Ingenix Database. A sample of the errors in database calculations include:

• Using data that is not representative of ASC charges within a geographic area;
• Improperly “scrubbing” of data so that the true rates charged by ASCs are reduced;
• Reporting of charges that are systematically skewed downward;
• Using incorrect and inaccurate methodologies to calculate UCRs;
• Lack of quality control to ensure the validity and authenticity of data submitted.

About Hooper, Lundy & Bookman, Inc.: HLB is the largest law practice in the country dedicated solely to representing health care providers in complex litigation, regulatory and transactional matters. With clients in 49 states and offices in Los Angeles, San Francisco and San Diego, we serve a broad array of health care providers, ranging from the largest national health care organizations, to community hospitals, ASCs, and physician groups. HLB's litigators regularly assist provider clients with litigation, arbitration and mediation services that have resulted in numerous favorable judgments and new case law. In 2008, for example, the firm represented California hospitals in a class action that resulted in a record settlement of more than $11 million. For more information, visit the firm's website at www.health-law.com.

Keywords: CLASS ACTION LAWSUITS