That’s why proponents say FAIR Health data will help.
What is FAIR Health?
FAIR Health is the name given to a database that was used exclusively by an insurance company until 2009. The database has been an important tool for determining how much insurance companies will reimburse people who have coverage under their plan.
Usually, patients know roughly what their health insurance will cover, as long as they stay within their network of participating providers.
But the reimbursement rate for out-of-network services typically varies. So patients and doctors might now know what portion of a claim would be covered by the insurer, and how much the patient is expected to pay.
The insurance company that owned the database calculated reimbursement rates for out-of-network services based on data from millions of actual claims. It then reimbursed patients for “usual, customary, and reasonable’’ rates in their geographic area.
In other words, it used the data to decide how much to reimburse patients for medical bills from doctors who had not contracted to accept fees at an in-network rate. But consumers and doctors didn’t have access to the data. That meant that patients couldn’t determine in advance how much they would get reimbursed by their insurer for medical procedures if they went to an out-of-network provider.
This made it almost impossible for consumers to prepare financially for upcoming charges.
Yet patients are responsible for paying the difference between what they get reimbursed and what a doctor actually billed.
In 2009, FAIR Health, a nonprofit corporation, took control of the database. The goal was to make the information public. Now the free data are available online. Consumers can search the database to determine the approximate costs of out of network services in their geographic area.
The American College of Emergency Physicians has endorsed use of the FAIR Health database as part of its commitment to fair billing and transparency.
Prior to 2009, an insurance company owned and controlled the database, which was used to set UCR rates for out-of-network services.
The data was culled from millions of actual medical billings.
But consumers and providers didn’t have access. They complained the insurance companies were basing reimbursement rates on “black box” data that only they could see.
Andrew Cuomo, then New York’s attorney general, launched an investigation into the insurance company’s ownership and use of the database. He maintained it was a conflict of interest for the insurer to control the database and use it to calculate reimbursements.
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