The hospital lobby is pushing the Department of Labor to “immediately open an investigation” into data company MultiPlan and others like it that contract with payers to reprice out-of-network service payments.
The call follows a New York Times investigative report that the company—which works with big names like UnitedHealthcare, Cigna and Aetna—is incentivized to drive down payments to providers in exchange for processing fees. The practice often leads to lower reimbursement for providers, larger bills for patients and, in some cases, higher payments for self-funded employers on the hook for MultiPlan’s processing fees, the NYT reported.
The report was based on interviews with more than 100 patients, doctors, billing experts and former MultiPlan employees as well as reviews of confidential and public documents. It noted that regulators “rarely intervene,” as enforcement largely falls to a Department of Labor agency that “has one investigator for every 8,800 health plans.”
In a letter sent to the department this week, American Hospital Association (AHA) President and CEO Richard Pollack framed employees and patients as the primary victims of the practices. The former see higher out-of-pocket payments on top of the hundreds they already pay monthly for employer-funded insurance, he wrote, while patients “cease or delay necessary treatment for fear of mounting costs.”
Pollack also highlighted the burdens for self-funded employers and healthcare providers.
Employer plans are subject to the “unpredictable and frequently large processing fees” because of a lack of transparency around Multiplan’s data analytics, “making it difficult for them to police or understand these inappropriate practices," Pollack wrote. The provider camp, which Pollack represents, “are forced to endure” reimbursements that fall below the costs incurred delivering services, he wrote.
“These practices demand government oversight,” he wrote.” The AHA appreciates that the Department of Labor has limited resources. Even so, the AHA urges the Department of Labor to immediately open an investigation into these practices and hold companies like MultiPlan and its corporate commercial insurer partners to account for these unconscionable practices, distorted incentives, potential violations of [the Employee Retirement Income Security Act (ERISA)] and, ultimately, harms to American patients and employees.”
Statements from MultiPlan and its commercial insurer partners included in the NYT’s report broadly pointed to the company’s “accepted” and “industry-standard” practices.
The companies have previously found themselves in providers’ crosshairs. Last summer, 50-hospital health system AdventHealth filed a lawsuit alleging that the “MultiPlan Cartel” business model is anticompetitive under federal law.
By contracting with “virtually all” major commercial insurers to generate “collusive” offers of underpayment, the system said it had lost out on “hundreds of millions of dollars” in revenues over several years. The case is still ongoing.
“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 that suit’s complaint.