It marks a solution to end what had been called "consumer fraud." But that solution could also launch a whole new industry in the Syracuse region and across upstate, centered on the question of what doctors are paid. Bill Carey has the story.

SYRACUSE, N.Y. -- Nancy Marie Bergman is no stranger to the medical system. She works in the medical staffing field. When she faced a diagnosis of breast cancer, she did her homework on costs. They were costs she would face using so-called "out of network" doctors, and not physicians within her insurance company's program. She knew what the cost should be. Her insurance company had a different idea.

"I was simply shocked. Out of the $42,000, I was going to be responsible for $24,000," said patient Nancy Marie Bergman.

Complaints like hers brought an investigation by the attorney general, uncovering a system where insurance companies, in effect, had created their own consortium to determine what they would pay for any procedure by out-of-network doctors. A system long attacked by doctors.

"This industry wide scheme of defrauding patients and physicians of proper reimbursement," said Dr. William Dolan, with the American Medical Association.

At a press conference Tuesday, New York State Attorney General Andrew Cuomo (D) said, "These health insurance companies have unjustly earned hundreds of millions of dollars by under-reimbursing consumers for the very product that they pay for."

Cuomo says it took a year, but the insurance carriers have agreed to scrap their current system and follow the instructions of a new not-for-profit company called "FAIR Health."

"It's going to build a new, independent database of rate information that will be used for the consumer reimbursement system nationwide," Cuomo said.

That should mean savings.

The benefits now go beyond just consumer savings on health care bills. There's a benefit, a direct benefit, to Upstate New York.

Cuomo says the insurers have agreed to pay about $100 million in start up costs for the new system -- which will be headquartered at Syracuse University.

"This will create real, secure and crucial jobs," said Syracuse Mayor Matt Driscoll.

Long term, Driscoll and Cuomo say this solution to a consumer problem could help create spin off companies and more upstate economic growth.

Cuomo said, "In government, you believe you can make a difference. Today, my friends, we have made a difference."

FAIR Health is the name of the new non-profit database for reimbursement. While it will be headquartered in Syracuse, work on the system will also touch campuses at Cornell, SUNY-Buffalo, the University of Rochester and Upstate Medical University. The new system is expected to be in operation within a year.