New York Attorney General Andrew Cuomo has reached agreements with two New York insurers to stop using the controversial Ingenix reimbursement database after threatening to sue both companies last month.

Andrew Cuomo

Cuomo announced that he has reached deals with Excellus Health Plan of Rochester, N.Y., and Buffalo, N.Y.-based Capital District’s Physician Health Plan to cease use of UnitedHealth Group‘s database that calculates out-of-network reimbursements for patients. Acknowledging faults in the system, both insurers will also reimburse thousands of New York consumers for underpaid claims, according to Cuomo.

Excellus is New York’s largest not-for-profit insurer, whose affiliates serve nearly 2 million people in 31 counties. In Buffalo, N.Y., it operates as Univera Healthcare, one of the area’s three largest insurers. CDPHP is a non-profit insurer insuring 400,000 patients through 29 counties in New York.

“Today’s agreements mean that Excellus and CDPHP will fulfill the promises made to their members to deliver fair rates and give consumers what they paid for,” Cuomo said in a statement. “We have expanded the breadth and depth of our reform efforts, and we have secured compensation for consumers across New York who were under-reimbursed in the past. Not only are we a step closer to the complete overhaul of a defective system, but this will deliver much-needed financial relief for members across Upstate New York.”

In February, Cuomo said he intended to sue both companies for defrauding consumers by using the Ingenix database. An investigation by Cuomo’s office has shown the database manipulated rates and relied on outdated information to determine reimbursement rate

In addition to stopping use of the database and reimbursing consumers, Excellus will pay $775,000 and CDPHP will contribute $300,000 toward a new, independent database run by a qualified non-profit organization yet to be selected.

To date, Cuomo has reached agreements with WellPoint, CIGNA, UnitedHealth Group, Aetna and Buffalo-area insurers Independent Health and HealthNow New York Inc. to stop using the database and pledge more than $90 million for a new one.

Martin Lustick, senior vice president and corporate medical director for Excellus said the insurer acknowledges the conflicts of interest with Ingenix and supports Cuomo’s efforts for a new, independent database.

“This will bring consumers across the country greater transparency in understanding how much they may be reimbursed for out-of-network medical services,” Lustick said in a statement. “Given the new information, we are pleased to reimburse any of our members who may potentially have been affected.”

John Bennett, president and CEO of CDPHP added that given Cuomo’s findings on Ingenix, “we are pleased to contact members who may have been underpaid as a result of the application of the Ingenix database and will reimburse those who have been adversely affected.”

“As a health plan uniquely run by practicing physicians in communities across New York, CDPHP understands deeply the concerns of its members and will continue to work hard to protect them,” he said.