AdventHealth has brandished a lawsuit alleging that MultiPlan’s business model of contracting with fellow payers and aggressively repricing out-of-network service payments is anticompetitive under Section 1 of the Sherman Act.
Per the complaint filed Wednesday in the U.S. District Court for the Southern District of New York, the payer network and analytics services company masterminds what AdventHealth repeatedly referred to as the “MultiPlan Cartel.”
AdventHealth said this “multi-year, ongoing conspiracy” comprises “virtually all of the major healthcare insurance payors in the United States” and mentioned Aetna, Elevance Health, Centene Corporation, Cigna Group, Health Care Service Corporation, UnitedHealth Group and Humana by name.
MultiPlan, however, has acknowledged that its contract agreements with these horizontal competitors exist and therefore is “jointly and severally liable per se for all of the damages caused by those agreements,” AdventHealth wrote.
The system is seeking damages for the alleged underpayments and lost revenues, which it places at “hundreds of millions of dollars.” It claims to have “overwhelming direct evidence” of MultiPlan’s allegedly anticompetitive contracts, including regulatory filings.
“MultiPlan knows it can get away with acting, in the words of an analyst, ‘like a mafia enforcer for insurers,’ because virtually every commercial healthcare payor has agreed to use its repricing methodology, leaving healthcare providers with no practical option but to accept the ‘repriced’ reimbursement amount that MultiPlan imposes,” Advent Health wrote in the complaint.
A representative for MultiPlan told Fierce Healthcare the company “believes this lawsuit has no merit and looks forward to disproving these baseless allegations.”
AdventHealth, a 50-hospital nonprofit operating in nine states, said New York-based MultiPlan began to upend typical negotiation between health systems and an individual payer in 2006 when it acquired a series of companies to build out a reimbursement claim analytics tool.
To bolster its analytics-driven low reimbursement amounts, the company marketed its tools to competitors and, now, per the complaint, uses confidential claims data from the other payers to generate “collusive” offers to providers that “radically underpay” for the services. Though many large providers have their own (often controversial) billing collections operations in place, AdventHealth said MultiPlan pressures providers into a “take-it-or-leave-it” offer that the payer estimates is accepted for out-of-network inpatient services 99.4% of the time.
“By 2020, MultiPlan was using its repricing tools to underpay 370,000 out-of-network claims per day for over 700 health insurance companies, resulting in a total underpayment of approximately $19 billion per year to healthcare providers,” AdventHealth wrote.
MultiPlan’s website currently highlights “more than $22 billion in savings annually.” The company reported nearly $1.1 billion in total revenues and a $579.2 million net loss across 2022, though the latter was largely due to a hefty impairment charge.
AdventHealth hedged its petition by outlining three “alternative theories of liability” that describe potential violations of the Sherman Act resulting from MultiPlan’s business model.
The first claim homes in on its role as a competitor to other payers and alleges a horizontal restraint of trade.
The second theory posits a “hub-and-spoke” conspiracy, where MultiPlan is the hub, the spokes are its contracts with other payers and the rim are agreements to use the repricing methodology rather than compete independently.
Finally, MultiPlan’s agreements would be improper due to “the anticompetitive effects throughout the relevant market for reimbursements of out-of-network healthcare services—as well as each relevant submarket for reimbursements by a particular payor—with no redeeming procompetitive benefits,” AdventHealth wrote.
Alongside seeking damages for economic harms, AdventHealth asked the court for an order permanently enjoining MultiPlan to continue operating its contracting model with other payers.