5 Key Takeaways From Our Investigation Into Health Insurer Leading Edge Administrators

Over the past few months, New York Focus has been investigating the health insurance company Leading Edge Administrators. The company has little public footprint, but on May 1 became the default insurer for the hundreds of thousands of New Yorkers who work for the state-funded home health care program known as Consumer Directed Personal Assistance Program (CDPAP).

That makes it one of the largest health insurers in New York state, and a huge recipient of taxpayer money.

We found that Leading Edge, which sometimes goes by the name Omni Advantage, routinely underpays doctors and hospitals and passes the cost on to patients, sometimes leaving them with thousands of dollars of debt. To do so, the company employs practices virtually unheard of in the insurance industry that lead to frequent lawsuits against it.

In the course of our investigation, we spoke with doctors, patients, health insurance experts, and six of Leading Edge’s former employees. We also reviewed hundreds of pages of court records and insurance documents.

Here are five takeaways from our ongoing investigation:

1. Leading Edge regularly shirks paying bills and passes the costs on to patients

Leading Edge’s business strategy is simple: It promises doctors a certain price, pays only part of it, and puts the remainder on the patient’s bill.

Leading Edge partners with larger insurers, such as Blue Cross Blue Shield, and issues its members insurance cards with those companies’ logos. But rather than pay doctors and hospitals what the larger insurers pay, Leading Edge uses a controversial software program to generate new, lower prices, then pays that amount and charges the patient for the rest.

This method can leave patients in five-figure debt, even if they have only used in-network doctors and hospitals. (Other insurers only use the software for out-of-network care.)

It is also legally dubious. One health economist said that unless Leading Edge’s contracts with larger insurers or doctors specifically allow them to use this software, they may be opening themselves up to lawsuits.

It wouldn’t be the first time. In 2021, New York’s largest hospital system sued one of Leading Edge’s clients, alleging that it had provided $10 million worth of care that Leading Edge had failed to reimburse. In another case, a surgery clinic sued Leading Edge after the company offered to pay only $294 for a medically necessary breast reduction.

These and other suits against the company reached confidential settlements.

2. Want to lodge a complaint or appeal your bill? Good luck.

Patients and doctors would regularly call the company to complain about Leading Edge’s low payment rates, former employees said.

The company was often unreceptive. Two former employees said they witnessed customer service agents hang up on callers to no consequence. A Pennsylvania woman currently insured by Leading Edge said that on several occasions, the company has promised to pay her bills but then taken no action.

If calls don’t work, patients and doctors can try appealing. Under federal law, patients have the right to formally ask their insurer to reconsider a bill, and insurers must respond within 60 days.

Leading Edge routinely ignored this requirement, former employees said, and would let appeals languish for months — or even years. Meanwhile, patients might be hounded by hospitals or bill collectors, seeking the money that Leading Edge had refused to pay.

Doctors may also appeal bills if they think the insurer isn’t paying what they’re owed. But this was unlikely to succeed, former employees said, since Leading Edge would deny all appeals from doctors by default.

3. Leading Edge’s own employees thought the company’s practices were unethical and possibly fraudulent.

We spoke to six former employees of Leading Edge, ranging from a member of leadership to a customer service worker.

They had harsh criticism for the company. “It was the wild, wild west,” said one. Others called it a “shitty situation” and a “cash cow” for the company and its clients.

One employee said they had to take anxiety medication and give themselves pep talks in the parking lot before coming to work. Another said they worried they could be getting caught up in fraud: “Every day, I worried that federal police were going to come in and arrest us.”

4. Leading Edge has previously helped employers keep money meant for their workers

From 2012 to 2020, Leading Edge ran an insurance company that collected $24 million in money that was meant to benefit home care workers and gave at least $22 million back to the companies — leaving almost nothing for the workers. The Department of Justice and New York Attorney General have successfully sued other home care companies for engaging in similar behavior; one such case reached a $17 million settlement last year.

5. Some lawmakers are concerned

Several members of New York’s legislature told New York Focus they’re worried about Leading Edge and what its coverage could mean for home health aides.