ALBANY, N.Y. January 15, 2009 - New York State United Teachers today hailed a $350 million settlement in a lawsuit filed with CSEA and other unions against United Healthcare, calling it an important victory for working New Yorkers in the Empire Plan who were unknowingly overcharged when the health insurance giant schemed to manipulate reimbursement rates downward.
The 600,000-member NYSUT, along with CSEA, the Organization of New York State Management/Confidential Employees and the New York State Police Investigators Association, had sued United Healthcare - parent company of the Empire Plan - in U.S. District Court, charging that its wholly-owned subsidiary, Ingenix, Inc., had artificially manipulated and skewed data to lower reimbursement rates for out-of-network services provided to Empire Plan members.
"This settlement delivers a clear message to working New Yorkers, many of whom are already struggling to pay their bills and frustrated by their dealings with their health insurance companies," said NYSUT President Richard C. Iannuzzi. "It puts health insurance companies on notice - unions will continue to be a watchdog for workers, defending middle-class families so they receive fair and honest treatment from their health insurance providers."
NYSUT Executive Vice President Alan B. Lubin said, "We've seen way too many examples lately of big corporations ripping off workers. This union win is a big step forward in changing a climate that favors the powerful and privileged at the expense of working people."
Lubin said some 100,000 NYSUT members in 160 school districts and United University Professions - the NYSUT local representing faculty and professionals at the State University - subscribe to the Empire Plan. "I commend Attorney General Andrew Cuomo for his industry-wide investigation that led to today's settlement, and Tuesday's $50 million agreement that will close Ingenix's database and create a new, independently maintained system that will be used to accurately determine 'usual and customary' reimbursements when members go out of network for medical care," Lubin said.
"The Empire Plan, like other insurance companies, promised to pay 80 percent of the 'usual and customary' rate for out-of-network services, with the worker picking up the balance of the bill. It didn't keep its promise," Lubin added.
"This settlement will stop United Healthcare's systematic rip-off of Empire Plan members who received medical treatment from doctors and health care providers who do not participate in the Empire Plan," Lubin said. "The term 'reasonable reimbursement' should mean just that, not huge medical bills for workers who should have been covered by the insurance company in the first place."
Lubin said, "The settlement includes Empire Plan members who, from March 15, 1994, until the preliminary agreement is approved by the court, received out-of-network health care benefits that were processed or reimbursed by United Healthcare using Ingenix's database. The settlement, which still must be approved by the U.S. District Court, also covers out-of-network providers."
In addition, the settlement requires United Healthcare to publicize the settlement though mailed and published notices to Empire Plan members. Once that process is complete, any compensation to Empire Plan members from the cash settlement fund will be disbursed by a claims administrator, Lubin said.
NYSUT, the state's largest union, represents more than 600,000 classroom teachers and other school employees; faculty and other professionals at the state's community colleges, State University of New York and City University of New York, and other education and health professionals. NYSUT is affiliated with the American Federation of Teachers, National Education Association and AFL-CIO.