MVP Health Care Inc. has reached an agreement with New York Attorney General Andrew Cuomo to resolve a New York State inquiry into how it reimburses clients for services from out-of-network physicians.

The Schenectady based a nonprofit health care provider has agreed to pay $535,000 over a five year period to help fund a new independent database and to cut its current connection with Ingenix Inc., the company whose database many insurers have used to set out-of-network reimbursement rates.

This makes MVP Health Care the third company to reach an agreement with Cuomo after United Healthcare and Aetna. However an Albany N. Y. based company Capital District Physician's Health Plan, CDPHP, has not settled and has been given a five-day notice of intent to sue for "refusing to abandon the use of the Ingenix database and embrace reform."

Cuomo has been investigating out of network claims for about a year and the first to settle in early January was United Healthcare, the country's largest insurer, which owns Ingenix, whose database will close. United Health is giving $ 50 million towards the setting up of a new database, while Aetna the second company to settle has agreed to give $20 million to the project.

According to the attorney general as Ingenix was a subsidiary of a major health insurer it had vested interests in settling rates that were so low that companies could underpay patients for out of network services. His investigations lasted for about a year and he subpoenaed more than a dozen companies in the inquiry.

Cuomo said his investigations showed that insurers used Ingenix's database to set artificially low reimbursement rates and that the database through faulty data collection, poor pooling procedures, and the lack of audits intentionally turned "usual and customary" rates downward.

"The issue today is our embracing of the attorney general's approach to an open and transparent and friendly database," said Gary Hughes, an MVP spokesman. MVP has more than 700,000 clients in upstate New York, Vermont and New Hampshire and although the company relied on Ingenix to determine out of network rates it did not like many others contribute data to the database which Mr. Cuomo has called "rigged."

"We recognize the attorney general's concern about conflicts of interest inherent in the Ingenix database," said Denise Gonick, executive vice president and chief legal officer for MVP. "MVP welcomes the opportunity to be the first upstate New York-based health insurer to introduce this reform to our members, and believes that consumers and providers will be well-served by the joint effort that we are announcing today."

While Cuomo was all praise for MVP for "proactively embracing reform" but he said referring to CDPHP that he would go after those who have not. Dr. John Bennett, president and CEO of CDPHP said, "As a health plan conducting primarily HMO business, CDPHP has little occasion to deal with out-of-network claims on behalf of its members," he said. "In fact, fewer than five percent of the CDPHP commercially-insured members are enrolled in a product with an out-of-network benefit. Of that small percentage, very few access out-of-network providers because most providers in the region are CDPHP participating providers. Thus, we have had relatively little use of the Ingenix product, and do not share data with them, unlike other plans."

He added that they had cooperated completely with Cuomo's office since the investigation began and if offered would "favorably consider the agreement or process agreed upon by the other regional plans, such as MVP."