Community Health Systems is the latest health system to allege that MultiPlan’s data-driven claims repricing business meets the bar for antitrust violation.
The public for-profit system filed a lawsuit in a New York federal court Wednesday, following in the wake of similar litigation launched last year by AdventHealth and just a few weeks ago by Allegiance Health Management.
Though the new lawsuit does not name major health insurers as co-defendants, CVS Health’s Aetna, Elevance Health, Centene Corporation, Cigna, Health Care Service Corporation, UnitedHealth Group and Humana are highlighted as “co-conspirators” in the “MultiPlan Cartel,” which CHS wrote “includes virtually all of the major healthcare insurance payors in the United States.”
CHS alleged that MultiPlan and the payers’ “blatantly illegal” conduct has led the health system to suffer damages “in an amount totaling hundreds of millions of dollars,” for which it is seeking repayments through the court.
The latest lawsuit outlines many of the same business relationships and public statements as its predecessors to describe MultiPlan’s claims repricing tool and the horizontal relationships with other payers.
MultiPlan, the complaints read, enlists the other payers to contribute their claims data to its tools, which then gives the company a leg up when repricing provider claims for out-of-network services. MultiPlan also claims a portion of the “suppressed” reimbursement for itself.
“Any ‘negotiation’ with MultiPlan starts from the position of MultiPlan’s collusive offer to radically underpay healthcare providers for their services, and invariably ends with MultiPlan forcing the healthcare provider to capitulate to an extreme underpayment,” CHS wrote.
MultiPlan held such agreements with “nearly every other significant healthcare insurance payor” by 2017, allowing its “spectacularly successful” strategy to flourish and pay out 370,000 out-of-network claims per day by 2020, CHS wrote.
As a result of the “ongoing cartel agreement” with companies its other service lines simultaneously compete with, the company pulls about $19 billion in reduced payments away from healthcare providers per year, CHS wrote in its complaint. Last month’s lawsuit from Allegiance Health Management floated a total of nearly $23 billion as of 2023.
CHS cites “overwhelming direct evidence” of MultiPlan's agreements with other payers, including Securities and Exchange Commission filings, sworn trial testimonies from payer organization heads and communications sent to providers.
CHS also alleged that the company is using the repricing service it's built within its own in-network claims and, citing presentations given by executives during earnings calls and investor conferences within the past year, said that the company is positioning itself to someday suppress in-network reimbursement claims as well.
“Most recently, at the January 9, 2024 J.P. Morgan Annual Healthcare Conference, [former CEO Dale White] told investors that the [Benefit Science Technology] acquisition will be a ‘game-changer’ for MultiPlan and serve as a “gateway to the in-network claims.”
Fierce Healthcare has reached out to MultiPlan for comment, though the company has previously declined to comment on similar litigation.
However, when an analyst asked about the prior lawsuits in an earnings call held Wednesday morning (before CHS’ filing), MultiPlan Chief Financial Officer Jim Head responded that the company would “continue to aggressively attack the market” and that the company’s offerings are “aligned with the goals of the [No Surprises Act],’ which broadly upended the out-of-network billing market last year.
The latest two health system lawsuits land in the wake of a critical New York Times investigation detailing MultiPlan’s arrangements with other major payers. The practices highlighted in that report subsequently spurred calls from the American Hospital Association and U.S. Senator Amy Klobuchar, D-Minnesot, for an immediate regulatory investigation of MultiPlan’s business.
As of Feb. 15, Franklin, Tennessee-based CHS’ subsidiaries owned or leased 71 affiliated hospitals. It brought in $12.5 billion in net operating revenues and a net loss of $133 million during 2023.