Oct. 28--The University at Buffalo will be one of five upstate universities working to develop a new nationwide independent insurance database of provider and consumer reimbursements for out-of-network medical care, Attorney General Andrew M. Cuomo said Tuesday. Cuomo announced the formation of a new not-for-profit company called FAIR Health that will create the independent database and a Web site where consumers can, for the first time, compare prices and reimbursements before they choose their doctors.

FAIR Health, which will be based at Syracuse University, will work with an upstate research network, also headquartered at Syracuse, that will accumulate the data that health insurers nationwide have agreed to rely upon.

Besides Syracuse University and UB, the new network includes the State University of New York Upstate Medical University in Syracuse, Cornell University in Ithaca and the University of Rochester.

The project will be funded with nearly $100 million in money collected by Cuomo in legal settlements from many of the state's largest health insurers. It's expected to create jobs, help the upstate economy and make FAIR Health and Syracuse a center for health care research, Cuomo said in a news release announcing the project.

"FAIR Health and the upstate research network headquartered at Syracuse University will bring much-needed transparency, accountability and fairness to a broken consumer reimbursement system," Cuomo said. "By transforming this system for consumers nationwide, New York proves its reputation as a reform leader for the nation."

The work will be led by Deborah A. Freund, Syracuse professor of public administration, in conjunction with the other schools. FAIR Health and the network will also design the new consumer Web site, and the information contained in the database will be available for academic research.

"The creation of an independent entity that assists health plans in establishing fair rates to pay for out-of-network services is a positive first step," said Cynthia Ambres, senior vice president and chief medical officer for BlueCross Blue-Shield of Western New York, a subsidiary of Buffalo-based HealthNow New York. "The need to provide transparency is very important."

But insurers were otherwise cautious, praising the move but also urging that the database include not only reimbursement rates but also doctors' original charges.

"True transparency . . . requires not only information about what plans pay, but also what physicians charge for their services," said Paul Macielak, president and CEO of the New York Health Plan Association.

"Patients have an equal right to and need for the information about what doctors charge in order to accurately calculate what their insurance will pay and what their out-of-pocket responsibility will be."

Cuomo's announcement caps a months-long investigation that examined how the insurance industry determines what to reimburse consumers for medical care received outside an insurer's network of doctors and hospitals. In particular, Cuomo probed the entire industry's use of a single database of "usual and customary rates" from markets nationwide to set their reimbursement levels.

He investigated because the database was run by Ingenix, a subsidiary of UnitedHealth Group of Minneapolis, the nation's second-largest health insurer. That posed a conflict-of-interest, Cuomo found, as Ingenix "had a vested interest in helping set rates low, so companies could underpay patients."

jepstein@buffnews.com

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