Back in 2009 I made the post below about the “tentacles” out there that relate back to the 15 year time frame where United and most of the large health insurance companies used a data base for normal and imagecustomary charges.  Here’s one more settlement and there’s more out there.  This relates back to Andrew Cuomo finding the algorithms in quoting the out of network fees to be low balled.  You take the numbers, average and run some code that produces the magical number and in this case the magic was not really there. I talk a lot about Algo Duping today and here’s one example that began years ago. 

Ingenix Data Base Has Some Long Reaching Legal Tentacles with Aetna, Blue Cross, Blue Shield, Humana

United benefitted both ways in paying lesser amounts in claims and then from the other insurers paying to license and use the algorithms.  It is what it is.  I read recently I hope this is correct that United makes less than half their revenue insuring people and the big money comes from subsidiaries like Optum, they do numbers, analytics and sell data for a big portion of their business.  Ingenix aka Optum now has been in the data selling business for a long time and they make millions in profits selling your data. 

Again this is one of the reasons I keep mentioning excise taxing the data sellers as it’s easy run algorithmic process. If you want the FDA and NIH to remain funded, this is a good idea and the device tax could be cancelled and there would be a much bigger pool with a heck of a lot more money to take in to tax so this would target the right folks making billions selling your data and take some pressure of the device companies who also make jobs, and those device companies that are stretched financially, well are they going to sell your data to pay this excise tax…think about that if you are a consumer that wants your data.  This is part of the reason that we don’t see  more manufacturing in the US as from a company stand point, hire the techs, mine and sell that data, little risk and exposure as the public has not a clue on the billions it generates for profit and is part of the reason we keep hearing about all the cash companies have on hand today. 

One More Good Reason to Tax the Data Sellers– Create Additional Funding for the NIH and FDA From Sources That Otherwise Are Too Greedy to Share & Contribute

Algorithms move money.  Nobody is guilty as usual but those algorithms ran during that time and put money to the bottom lines of health insurance companies, several years.  This is my personal view here with analytics today and all the claims that software can do with questioning the accuracy of such algorithms as cases like this come up and we had bad math and formulas, so where is the real trust.  A few weeks ago I posted a video from Christopher Steiner about how algorithms are taking over the world.  He’s in accord with what I say a lot here and if you watch it he explains too on how formulas and algorithms are moving beyond stocks and are in every other area of business, he mentions a lot of healthcare formulas here so you can listen in.  Actually I wished that I had been able to see it at the TED Orange Coast convention as it was right in my own back yard.  I just added this to my collection on the left hand side of folks that have something important to say.  Just scroll down the left hand side and all these videos are always there to view. 

Algorithms Are Taking Over the World…Automate This (Video)

It appears Aetna has calculated like United did on what they owe and at this point with the number of years this took place and the time frames, most doctors do not have and did not have at the the time to produce such claim numbers, the analytics to create their own claims as the time it takes to go back over paper records is prohibitive.

Actually if more economists would collaborate with more mathematicians I think we might have a little better forecasting going on as many economists sometimes get those “flawed” reports and rely on antiquated methodologies of math too, so bump head guys and see what collaboration might do.  How much is that algorithm in the window?

When it comes to analytics and saving money what do we believe at times?  Everyone says healthcare is so behind, not so when it comes to electronic medical records software as vendors pay $25k to get certified to ensure accuracy and functionality and can’t say the same for the payer side as for over 4 years I have posted tons of articles about discrepancies with their algorithms, it’s all public and otherwise published information.  I even had a little kudos on this article from Nielsen and few others. 

Big Data, Flawed Data, Business Intelligence, Where’s The Future and What Has Been Our Past…A World With ”Algo Duping” of Society and Consumers

If you go back 3 years I had this to say about asking the question if the US needs a Department of Algorithms or something along that line to verify and find accuracy and value and I think this suggestion still holds 3 years later as a valid idea.  I have written queries until they come out my ears and back when I used to write, accuracy was and is my main focus. 

“Department of Algorithms – Do We Need One of These to Regulate Upcoming Laws?

This is why too when we have stories like  that former computer programmer from Goldman it makes me a little nuts as when you apply some logic here, where do you get a jury that can hear such a technical case and understand it.  With a little satire a while back I asked “do you send a jury of peers to CodeAdacemy (a free online site that teaches coding and math) first before the a fair trial can be conducted?   If that comment says nothing else it tells you how complex IT infrastructures are today. 

There’s more of these lawsuits floating around out there and as they settle we hear in the news.  About a year ago I tried to make it my effort here to help the consumer “recognize” some of the effects of algorithms in business today and started this series called “The Attack of the Killer Algorithms” where I somewhat demonstrate how the algorithms played their roles with “real life human episodes” took place.  I’m still going a year later and just added Chapter 48.  IT Infrastructure rules the world, government, you name it and try to recognize some of this if you can because there’s billions made in this business.  Why do you think Health IT is so expensive.  It takes a lot of time to develop them as well, I remember long hours at the keyboard myself and many sleepless nights way back when I was writing. 

“The short order code kitchen burned down years ago and most everyone missed the fire sale”…meaning developers need heck of a lot more time as those days of simple developing are gone forever with complexities and with the use of platforms today.  It was that way at one time. 

Attack of the Killer Algorithms–Digest & Links for All Chapters–on How Math and Crafty Formulas Today Running on Servers 24/7 Make Life Impacting Decisions About You

To make one more statement relative here, I’m sure others in tech felt the same as they know the story too but the idea of changing Medicare, the IT infrastructure as was discussed in the election campaign…literally cost non effective.  The time and money, and of course nobody want to spend that money so all these comments about restructuring Medicare..hmmm. real or Memorex? It would be such an expensive and huge project code wise that the US would probably end up having to outsource to both India and China to find enough programmers, engineers to do this, so all of that rhetoric in the campaign from a strict code and technology standpoint made no sense.  You have to build on what is there today and not restructure something that huge. 

Some folks in Congress maybe would do well to actually have some figures on the “real” cost not to mention a “huge” and I mean “huge” disruption and even the insurers saw that coming as with Aetna and Untied, they build this type of IT infrastructure all the time and something that massive would cost them a lot of money that would eat right into their profits…just a little logic and reality talk here.   That whole conversation and idea about “vouchers” is what I call pie in the sky and I have said it many times here at the Medical Quack. I realize too that elections are all about stirring up emotions too and it did do that for sure but that’s how we vote in the US on emotions and not logic so that was the plan.  I don’t know if this is still current or not but Aetna has this reinsurance policy in the Cayman Islands which as I understand is to cover a catastrophe situation with not meeting the medical loss ratios. 

Aetna Takes Out Reinsurance Deal In The Cayman Islands- $150 Million to Kick When Medical Loss Ratio Hits 104%

New study out and take this tongue and cheek that the thought of math creates physical pain, you can read it for yourself at PLOS One and the reason I bring this up…suggesting a huge IT infrastructure you know how much pain that would be inflicting?  I made the post trying to get some consumer attention but to my surprise, developers said “yes we feel pain” and when I thought about it, yes I had pain when I was developing when trying to get some portions of the software to function correctly and compile:)  Maybe this study has something to say?  Trying to avoid pain can lead to some serious Algo Duping with just believing whatever gets put in front of you.  I have one University Professor that agrees with me:)

“Algo Duping” – PLOS One Journal Publication Explains Why The Fear of Math Plays a Big Role As One Underlying Reason We All Get Duped And Those Who Don’t Fear Math Take All the Money, Gradually, Using “Mathematical Formulas & Algorithms”

So we have one more settlement done and I don’t know how many more are out there.  We had one potential big on here in California that was filed not too long ago, as they felt there were not included in other settlements…jury and case still out on that one as far as I know.  It goes back to 2010. 

Outpatient Surgery Centers File Class Action Lawsuit Against UnitedHealth and Ingenix for Underpayments

If you want logic and some hands on experience interpretations on how some of this plays out, then you might like some of my posts, but it is scary and I apologize if I scare anyone but here my theme is logic, accuracy and pursuit of the truth as seen through my eyes and I try to keep the “denial viruses” at bay the best I can.  I use material too here from people that also are a lot smarter than me:)  BD


The accord calls for Aetna to pay $60 million into a general settlement fund, plus as much as $60 million more depending on how many people submit claims.

Aetna said it will take a $78 million after-tax charge in the current quarter for the settlement, and that the charge will not affect operating earnings.

It expects to pay for the settlement over the next one to two years. 

Patients and doctors accused Aetna of using databases once provided by Ingenix Inc, a unit of UnitedHealth Group Inc (UNH.N), to systematically underpay claims involving services and supplies from out-of-network providers.

It would cover patients who used out-of-network providers from March 1, 2001 to the present, and cover out-of-network providers from June 3, 2003 to the present. The litigation began in July 2007.


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