UnitedHealth's Ingenix Buys Medical Bills Auditor

John Commins, for HealthLeaders Media , June 1, 2009

Ingenix Inc., UnitedHealth Group's beleaguered IT consulting arm, today purchased Franklin, TN-based medical bills auditor AIM Healthcare Services Inc., and its Netwerkes and Ingram & Associates affiliate, the companies said in a joint announcement.

"AIM is the premier company for improving payment accuracy between healthcare payers and providers," Andy Slavitt, CEO of Eden Prairie, MN-based Ingenix, said in a media release. "Everyone–including most importantly, the patient-consumer–wins. Together, Ingenix and AIM will focus on making administrative and payment processes simple, standard and intelligent for the entire health care system."

The terms of the all cash sale were not disclosed. However, the subscription Web site Nashvillepost.com, citing unnamed sources, placed the value of the deal at about $430 million.

In January, as part of a settlement with the New York Attorney General's Office in a class-action lawsuit alleging conflict of interest and too-low reimbursements, UHG agreed to close Ingenix's database, which prosecutors said at that time was the largest provider of healthcare billing information in the nation. UHG also agreed to pay $50 million to a "qualified nonprofit organization" to establish an independent data base "to help determine fair out-of-network reimbursement rates for consumers throughout the United States," New York Attorney General Andrew Cuomo said at the time.

After a year-long investigation, Cuomo's office had determined that many of the nation's large health insurers unfairly saddle consumers with too much of the cost of out-of-network healthcare, and relied on Ingenix's database to determine their "usual and customary" rates. Cuomo's investigation focused on allegations that—for more than 10 years—Ingenix's database intentionally skewed "usual and customary" rates downward through faulty data collection, poor pooling procedures, and the lack of audits. Ingenix and UHG admitted to no wrongdoing in the settlement.

On Monday, there was no mention of the class-action settlement. Instead, Ingenix and AIM officials said the new company will offer a single source for payment accuracy for health plans and hospitals that will more easily identify and reconcile payment inaccuracies, and will no longer need to engage with multiple parties to achieve payment integrity.

In announcing the purchase, the two companies cited a recent study by The Lewin Group which determined that claims inefficiencies cost the U.S. healthcare system more than $150 billion per year.

John Commins is a senior editor with HealthLeaders Media.

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