Cuomo expands probe of health insurers

New York Attorney General Andrew Cuomo said Thursday he issued new subpoenas to Aetna Inc., Cigna Corp., UnitedHealth Group Inc. and WellPoint Inc., and other health insurers in a broadening investigation of possible fraud costing consumers hundreds of millions of dollars.

Cuomo is also looking to subpoena testimony from the chief executives of those companies, as well as from executives of Empire Blue Cross Blue Shield, Excellus, and the combined Group Health Inc. and HIP Health Plan.

"The CEOs are responsible for their corporations and these actions had a significant impact on families all across the state," Cuomo told The Associated Press.

Cuomo is seeking all e-mail correspondence involving the companies' CEOs, chief operating officers, chief fiscal officers, presidents and employees supervising claims. He also wants any records that might challenge the accuracy of reimbursements that he feels are too low.

Cuomo says he believes the companies used the UnitedHealth Group-owned Ingenix to set rates, which resulted in consumers being reimbursed at unfair and unjustifiably low rates. Low reimbursements mean higher out-of-pocket costs for consumers when they choose or need physicians outside their health plans.

"Ingenix is a wholly owned subsidiary of the industry and the company is determining the rates that the insurance companies use to reimburse consumers," Cuomo told The Associated Press.

Spokesmen for GHI-HIP, Cigna, Independent Health, Excellus and BlueCross BlueShield declined to comment on Cuomo's claims except to say the companies are cooperating with the attorney general.

There was also no comment from a group of New York HMOs subpoenaed by Cuomo. They include the Capital District Physicians Health Plan; Health Now New York Inc.; Independent Health; and MVP Preferred Care.

"I believe consumers have been defrauded," Cuomo said. "I believe the companies have been allowed to do it nationwide. I believe there is a certain corporate arrogance to these companies."

He said the companies, which face less competition and record profits after a series of mergers, aren't fulfilling their commitment to pay fair reimbursements.

"The CEOs are responsible for their corporations and these actions had a significant impact on families all across the state," Cuomo said.

The new subpoenas are part of a case first announced in February. It relies on the state's powerful Martin Act, which provides criminal and civil enforcement powers for publicly traded companies. Cuomo is basing the other subpoenas on state consumer fraud laws.

He is also seeking to compel the testimony of CEOs to determine if the companies knew they were relying on artificially low reimbursement rates for customers and if the companies' investors knew of the practices.

Cuomo filed a notice in February saying he intended to sue Ingenix, but hasn't yet. He said negotiations with the company continue and the notice allows him to file the civil suit without further notice.

"We've been in discussions with him all along and continue to cooperate with the attorney general," said Joan Schimml of Ingenix.

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Associated Press Writer Valerie Bauman contributed to this report from Albany.