MultiPlan Corporation said Monday that it doesn't expect a UnitedHealth Group policy change to have a "material impact" on the New York-based cost management company's financial performance for 2021.
The company still expects to generate up to $1.1 billion in revenue for the full year, despite its stock price diving 25% over the past week due to "ongoing discussions in the media and among the investor community" over the Minnetonka, Minn.-based health giant's insurance subsidiary plan to no longer pay some out-of-network claims. Starting July 1, UnitedHealthcare will no longer pay out-of-network claims when fully insured customers seek non-emergency care outside of their local coverage area.
A UnitedHealthcare spokesperson said the change was made to reduce costs and improve quality care.
"Based on the company's understanding and its team's economic analysis of this client policy change, to date, MultiPlan does not believe it will have a material impact on its business," the company said in a statement.
The reassurance comes after a report that UnitedHealthcare was phasing out its use of MultiPlan's network-based business, which the insurer used to re-price out-of-network bills for fees lower than a typical rate, and developing NaviGuard as an in-house alternative to MultiPlan's services. UnitedHealth Group faces at least one lawsuit over its use of MultiPlan. A short seller report by Muddy Waters Research last year estimated that UnitedHealthcare could comprise a third of MultiPlan's business.
MultiPlan went public through an $11 billion special-purpose acquisition company, or SPAC, in July 2020, with some analysts questioning whether the deal was done as an elegant solution to a looming bond maturity problem, rather than a growth opportunity by investors. The company has since bolted on two acquisitions, purchasing HST for $140 million in November 2020 and Discovery Health Partners for $155 million in March. MultiPlan aimed to build up its analytics and payment integrity services with the deals, as payers like UnitedHealthcare develop alternatives to its network-based services.
A Bloomberg Intelligence report noted that public and legislative scrutiny could also threaten MultiPlan's network-based product.
"Increasing scrutiny of out-of-network pricing and surprise billing, as well as the trend of providers moving in-network with payors, has fueled uncertainty about the stability of MultiPlan's base business," the Bloomberg report reads.
Some analysts saw UnitedHealthcare's policy change as a reaction to the surprise billing ban, which will go in effect at the start of 2022 and could impact MultiPlan and other similar companies' revenue in the future.
UnitedHealthcare did not immediately respond to an interview request. MultiPlan did not provide a comment by deadline.
