In an effort to avoid a perceived conflict of interest, Deborah Freund, a Syracuse University professor of public administration and senior associate at SU’s Center for Policy Research, stepped down from her position on the Excellus Board of Directors on Friday to focus her attention on the FAIR Health database.

FAIR Health is a database spearheaded by Attorney General Andrew Cuomo and assembled by an SU-led research team with hopes of lowering health care costs. Its purpose is to determine how much co-pay an insurance company, such as Excellus, should provide to consumers who use out-of-network plans, in which they can choose their own doctor and have the insurers pay a portion of the cost.

Even though SU, Excellus and FAIR Health said they knew of Freund’s potential conflict of interest from the start of the project and deemed it not to be an issue, some medical consumers’ advocate groups said the perceived conflict of interest is contrary to FAIR Health’s goals.

“I fully advised all involved parties of both my involvement in this project and my affiliation with Lifetime (parent company of Excellus) and Excellus,” Freund said in a statement released Friday. “Nevertheless, given my desire to avoid even the perception of a potential conflict of interest, and given that with the commencement of work on the project within the past three weeks, I anticipate needing to devote my full attention to that work. I have concluded that it is best that I resign from the Lifetime Board of Directors and the Excellus Central New York Regional Advisory Board at this time,” she said.

FAIR Health arose after Cuomo discovered and sued health care providers, including Excellus, who used a private health care research and information company called Ingenix to determine how much to charge consumers and allegedly overcharged. The suit was settled with the disbandment of Ingenix, and $100 million was given to construct the FAIR Health database. Freund was chosen to lead the team of SU researchers.

Freund was paid $61,378 to work as part of the Board of Directors at Excellus, according to a financial report Excellus filed with New York state two weeks ago. She had been a member since 2004. But she resigned from her position Friday, citing a desire to eliminate a perceived conflict of interest and a need to devote more time to the FAIR Health project.

Freund declined to comment on the issue outside of her Friday statement and directed all comments to Kevin Quinn, SU’s vice president of public affairs.

Freund disclosed her potential conflict of interest when the idea arose that she might lead the FAIR Health project, Quinn said. Because she was considered an expert in the field, which the project required, the attorney general’s office waived potential conflict of interest and deemed her appropriate to work on the project, he said.

“The fact is there was no conflict of interest,” Quinn said.

Many safeguards were put in place to ensure Freund did not face a conflict of interest, Quinn said. One such safeguard was that Freund could not see the company from which the data she analyzed originated. Additionally, Freund saw aggregated data that was presented to her by other staff members.

“Once it came in, it was made anonymous, essentially before any data ever gets to her,” Quinn said.

Excellus also took steps to ensure Freund’s involvement did not pose a conflict of interest, said Liz Martin, vice president of communications at Excellus, in an e-mail. Freund and the board agreed that she would not attend or remain at meetings when FAIR Health was a topic, Martin said.

“We believe Dr. Freund and the company followed an appropriate process involving both disclosure and review,” Martin said. “Dr. Freund brought the issue of a potential conflict to our board’s attention last year when the possibility of her involvement with establishing the new database arose. She laid out all the facts.”

But despite these claims, some consumer advocate groups argue that there still was a conflict.

There are two types of conflict of interest — actual and perceived — said Art Levin, director of the Center for Medical Consumers in New York City. While Freund may not have had an actual conflict of interest, the fact that she worked on both FAIR Health and the Excellus Board of Directors posed a perceived conflict of interest, Levin said.

FAIR Health was created to eliminate the conflict of interest between insurance companies and how much they pay against an insurance claim, Levin said. To have a perceived conflict of interest could mar the project in the future, even with Freund’s resignation from the board, Levin said.

“It’s not to say that anything bad has happened or anything bad would happen,” Levin said. ‘The reason they went to academic centers, I think, was to take themselves out of this direct circle of folks who play in the health insurance and health benefits arena, and yet the person in charge of the project is connected to an insurance company and to its Board of Directors and to a very large and important insurance company.”

 

Published on March 8, 2010 at 12:00 pm