Facts of Class Rep                              CalPERS and Anthem’s Standardized Representations

Definition of Allowable Amount              Fairhealth.org

URL: FairHealth.org



For the services that Brad Heinz receives, there is comparable data to establish the adequate usual, customary, and reasonable rates. For example, FairHealth.org reimbursement data supports that the “Allowable Amount” fee for a 45 to 50 minute session of Dr. Walker’s services was $200 in Heinz’s zip code. Exhibit 61.


Anthem’s/CalPERS’ reimbursement rates can also be compared with the rates for the same or similar services rendered in the same locality that are readily available in the FairHealth.org and other comparable databases.


CalPERS regulation refers to the Relative Value Studies of the California Medical Association, but the CMA has not published the Relative Value Studies since at least the 1980’s. There is no current Relative Value Study by the CMA.


Although the specific problems in CalPERS’ and/or Anthem’s data, policy, practice or method for determining the greatly reduced “Allowable Amount” are not presently known to Plaintiffs, the issues regarding inadequate reimbursements based on incorrect Allowable Amounts or references to other medical expenses have been litigated before. For example, in cases challenging the reasonableness of reimbursements, the specific criticisms of claims processing in Ingenix were summarized into three broad categories. First, that Ingenix did not audit the data provided by insurers to make sure that the charges properly reflect what providers actually charge in the marketplace. Second, that Ingenix used statistically invalid “edits” to exclude a disproportionate amount of high charges from its UCR calculations. Third, that Ingenix “lumps” charges for the same service together regardless of whether the service was provided by a certified specialist with many years of experience or a less experienced physicians such that the aggregate UCR rate calculated by the database was artificially low.


The Assurance Order required that the industry stop using the Ingenix database and spend $50 million to create a “new, independent database, not controlled by any insurer, to be used for determining fair and accurate reimbursement rates.” The Assurance Order also announced the establishment of a “Healthcare Information Transparency Website” (“HIT Website”) to inform and educate the public about reimbursement rates. The “new” database to replace Ingenix was to be funded by contributions from the following insurers: UnitedHealth Group ($50 million), Aetna ($20 million), Wellpoint ($10 million), CIGNA ($10 million), MVP Health Care Inc. ($535,000), Independent Health ($475,000), and HealthNow ($212,500).


The independent not-for-profit created by the Assurance Order to establish and run a new database to replace Ingenix is called “FAIR Health, Inc.” (which stands for “Fair and Independent Research”). FAIR Health was created to serve as “an independent, objective, and transparent source of healthcare reimbursement data for consumers, insurers, healthcare providers, researchers, and policymakers.” Like Ingenix, the FAIR database is a “national database of millions of de-identified healthcare claims … submitted directly to FAIR Health by insurers and other healthcare payors.” The “paramount goal,” however, is transparency and integrity.


FAIR has also created the “FAIR Health Consumer Cost Lookup,” targeted towards consumers, which consists of a “free, user-friendly website whereby patients can estimate the out-of-pocket expenses they will incur if they seek “out-of-network” care.”