MultiPlan destroys market competition and engages in price-fixing with major insurers, a lawsuit from the American Medical Association (AMA) and the Illinois State Medical Society alleges.
The lawsuit (PDF) accuses MultiPlan of forcing physicians to take low rates of reimbursement for out-of-network medical services, prompting medical practices to join other employment arrangements, stop offering services or even close entirely, a news release says.
“What this lawsuit makes plain is that while many in our health system are striving for improvement, MultiPlan is profiting from price fixing,” said AMA President Bruce Scott, M.D., in a statement. “This is one more example of insurance companies playing by their own rules without regard to patients or the legitimate costs required to care for them.”
“The lack of transparency on how these fees are calculated along with the payment structure needs to be fixed,” added Piyush Vyas, M.D., the president of the Illinois State Medical Society.
UnitedHealth Group, Aetna, Cigna and Health Care Service Corporation are named as co-conspirators but not listed as defendants.
The plaintiffs say MultiPlan's revenues from repricing out-of-network payments skyrocketed from $23 million in 2012 to $709 million in 2021. MultiPlan receives a fee from an insurance company when it reprices a claim to allow the insurer pay less.
They also claim MultiPlan acted as a “crucial messenger and conduit” with insurers so they could share confidential information and suppress rates, often through proprietary technological programs that complete only basic math equations. The plaintiffs refer to these programs as “smokescreens.”
The company regularly reprices services 1.5 to 49 times lower than traditional methods, a study from the Office of the New York State Comptroller determined in 2020.
MultiPlan, a data analytics firm, is one of the country’s largest third-party networks. The company works with the top 15 major health insurers and approximately 700 total insurers to determine how much out-of-network providers should be paid. A New York Times investigation revealed the insurers and MultiPlan work closely to greatly reduce reimbursements to providers and, in turn, leave patients with huge medical bills.
"This is another copycat lawsuit of dozens filed by the same plaintiffs’ counsel, all of which are before the same judge handling the multidistrict litigation in the Northern District of Illinois," a MultiPlan spokesperson told Fierce Healthcare. "We have consistently stated that these lawsuits are without merit and would ultimately increase prices for patients and employers."
MultiPlan did score a win in August when a California court tossed a case that claimed MultiPlan’s business model was partially responsible for a nonprofit hospital going out of business, but the hospital and provider lobbies remain a constant thorn in the side of MultiPlan’s legal team.
AdventHealth filed legal action against MultiPlan last year. Allegiance Health Management and Community Health Systems followed suit earlier this year after the American Hospital Association urged the Department of Labor to open a new investigation into the company.
And in 2022, the AMA joined a class-action lawsuit against Cigna that claimed the insurer underpaid for claims filed by providers in the MultiPlan network.
UnitedHealth Group, and other major insurers, settled with the AMA in 2009 when the organization claimed UHG subsidiary Ingenix was also undercutting reimbursement rates by as much as 28% through similar business practices.
The insurers created FAIR Health, an independent organization that calculates ‘usual, customary and reasonable’ provider charges, and they promised to not create an alternative for five years.
“The five-year terms of those settlements ended in 2015 and 2016,” the lawsuit explained. “When those bans lapsed, insurers shifted away from FAIR Health and began to fix rates again via MultiPlan.”