UnitedHealth Group has settled a class action lawsuit over its Ingenix database.  The $400 million settlement with the American Medical Association (AMA) comes just days after UnitedHealth settled similar charges with the state of New York for $50 million.

United and the largest health insurers in the country rely on a database operated by  Ingenix  -a wholly-owned subsidiary of UnitedHealth – to determine their “usual and customary” rate.  The Ingenix database uses the insurers’ billing information to calculate “usual and customary” rates for individual claims by assessing how much the same, or similar, medical services would typically cost, generally taking into account the type of service an (more…)

UnitedHealth Group has agreed to pay $50 million to settle charges that it overcharged millions of customers.  As part of the settlement with the New York State Attorney General’s Office, UnitedHealth Group will also revise the process that health insurers across the country use to determine reimbursements when members receive services from out-of-network providers.

According to the Attorney General’s office, the settlement stems from an  industry-wide investigation begun last February into allegations that health insurers unfairly saddle consumers with too much of the cost of out-of-network health care.  According to a press release issued by the office, seventy percent of insured working Americans pay higher premiums for insurance plans that allow them to use out-of-network doctors.  In exchange, insurers often promise to cover up to eighty percent of the “usual and customary” rate of the out-of-network expenses, and consumers are responsible for paying the balance of the bill. (more…)

A federal investigation into bid rigging and other illegalities in the municipal bond business is currently underway, The New York Times reported today.  The investigation has already claimed one political casualty – former New Mexico Governor Bill Richardson, who withdrew as Commerce Secretary Nominee  amid a federal investigation into how a political donor from California won a lucrative contract to put together a bond deal for that state.

According to The Los Angeles Times, the firm involved in the Richardson withdrawal was CDR Financial Products.  The company acts as an investment middleman by helping government and nonprofit entities broker competitive bids from banks, insurance companies and others. It helped put together a complex bond financing deal for a $1.6-billion highway and transportation construction program for the New Mexico authority.  According to The Los Angeles Times, CDR collected $1.5 million in fees from the deal. (more…)

Consumers may be getting scammed when it comes to cell phone text messaging rates, according to a new report in The New York Times.  As the Times article points out, cell phone carries incur virtually no costs when customers send text messages, yet text messaging rates have doubled over the past several years.

Since 2005, customers of Verizon Wireless, AT&T, Sprint and T-Mobile have seen their text messaging rates jump from 10 cents a message in 2005 to 20 cents a message.  The latest price hikes came just one year after all the major carriers raised individual text messaging rates from 10 cents a message to 15 cents per message. Sprint was the first carrier to increase the text message rate to 20 cents in the Fall of 2007, and all of its three main competitors quickly followed suit. (more…)

Regions Morgan Keegan is facing an avalanche of arbitration claims over  its failed bond funds.  The first wave of Morgan Keegan  arbitration hearings is scheduled to begin later this year, with more to follow early next year. Plaintiff’s lawyers say 1,000 to 1,500 arbitration cases ultimately could be filed against Morgan Keegan, with potential damages surpassing $200 million.

Regions Morgan Keegan is the investment banking and securities division of Regions Financial Corp, the largest banking system in middle Tennessee.    Since 2007, the firm’s Regions Morgan Keegan Select Intermediate Bond Fund and Regions Morgan Keegan Select High Income Fund  lost up to 95 percent of their value, thanks to losing bets on high-risk collateralized debt obligations. (more…)

A risk assessment group now says damage costs from Hurricane Ike could go as high as $21 billion.  That figure would make Hurricane Ike the third most expensive storm in U.S history, behind Hurricanes Katrina and Andrew.

The new estimate from Risk Management Solutions of $13 – $21 billion is higher than the $7 – $21 billon figure the group released just four days after the Sept. 13 storm.  The damage estimates include $10 billion to $15 billion for wind and storm surge, $2 billion to $3 billion from inland wind and flood losses and $1 billion to $3 billion in offshore losses.   (more…)

As residents of the Gulf Coast work to rebuild after Hurricanes Ike and Gustav, lawmakers in one state are working on a plan to protect hurricane victims from massive insurance deductibles.  The plan being considered in Louisiana would limit insurance companies from imposing more than one storm deductible on policyholders in a single season.  The proposal is being put forward by the Louisiana Insurance Commissioner and has the backing of two key state lawmakers.

“Named storm” deductibles are imposed by insurance companies in hurricane zones from the Gulf Coast to New England.  These deductibles can be as high as 5 percent of a home’s value.  In such cases, a policyholder with a home valued at $200,000 would be responsible for a deductible of $10,000.  Unfortunately, many people are not even aware that such a policy exists until they make a hurricane damage claim. (more…)

Cancer patients often look to the Internet for emerging trends in cancer treatment, but  many are duped by scams that promise so-called “cures” that are anything but, say experts.  Just last month, five companies were charged with making false and misleading claims; settlements were reached with six other companies, the U.S. Federal Trade Commission (FTC) announced.

The companies marketed products that included essiac teas and other herbal mixtures, laetrile, black salve—which is a corrosive ointment—and mushroom extracts.  “There is no credible scientific evidence that any of the products marketed by these companies can prevent, cure, or treat cancer of any kind,” said Lydia Parnes, director of the FTC’s bureau of consumer protection, the Associated Press reported.  Meanwhile, the U.S. Food and Drug Administration (FDA) issued warning letters to two dozen companies that were selling alleged cures, including cure-all teas, tablets, and tonics.  Earlier this year, over 100 manufacturers of such products were issued similar letters. (more…)

Hurricane Ike victims in Texas are reportedly facing long waits for meetings with insurance adjusters.  Adjusters are apparently being hindered by the shear number of claims, areas that are still inaccessible and properties with damage so extensive that they require multiple inspections.  Many Hurricane Ike policy holders are understandably anxious to have their insurance claims settled so that they can begin rebuilding their lives.  But it is important that anyone with a Hurricane Ike insurance claim understand their rights and responsibilities so that in addition to having their claim paid quickly, it is also paid fairly.

According to Texas law, insurance companies usually have 15 days to start investigating a claim once a policyholder lets them know about it. But when a natural disaster strikes, the state’s insurance department can extend that deadline by 30 days. That was done on Wednesday.  Insurers can take as long as they need to investigate claims, such as sending adjusters and inspectors out to examine damages and collecting reports.  Once an investigation is complete, insurance  companies have  30 days to decide whether to pay a claim from a natural disaster, compared to 15 days in a non-disaster situation.  If the claim is accepted, the company has five days to make the payment.  If an insurance company doesn’t meet these deadlines, the state can impose fines. (more…)

A Texas consumer group is decrying the Texas Windstorm Association’s recent announcement that it won’t pay for storm  surge damage from Hurricane Ike. Because storm surge is caused by the winds that accompany a hurricane, the group Texas Watch says that such damage should be attributed to wind.

The total cost from Hurricane Ike is expected to be high.  As a result, insurers will be looking for ways to limit their exposure.  Attributing damage to storm surge, rather than wind, will help in that effort.  Texas Insurance Commissioner Mike Geeslin told a legislative panel Wednesday that more than 50,000 insurance claims have already been filed and the number could go as high as 300,000. (more…)