Community Health Systems sued MultiPlan Wednesday, accusing the data analytics firm of allegedly conspiring with large insurance companies to fix commercial rates — an alleged violation of federal antitrust laws.
The lawsuit, filed in the U.S. District Court for the Southern District of New York, represents the third time a hospital system has taken MultiPlan to court in the past nine months.
Related: How the surprise billing ban changes MultiPlan's business
MultiPlan President and CEO Travis Dalton said on the company's first-quarter earnings call Wednesday that the lawsuits, generally speaking, do not change the company’s strategy. The call took place before Community Health Systems filed its complaint.
“We’re confident in the services we provide … We offer an array of solutions across providers, members, employers and health systems. We’re aligned with the goals of [the No Surprises Act] and otherwise,” Dalton said in response to an analyst question.
MultiPlan said in Securities and Exchange Commission filings Wednesday that it does not believe the legal proceedings will have "a material adverse effect on our financial condition or results of operations."
Community Health Systems' antitrust allegations in the suit go beyond those in other complaints by Altamonte Springs, Florida-based AdventHealth — filed in August — and Bossier City, Louisiana-based Allegiance Health Management, filed last month. The Franklin, Tennessee-headquartered for-profit chain's complaint targets how MultiPlan allegedly influences in-network pay, whereas the others focused on out-of-network rates.
“We believe this lawsuit has no merit, and we look forward to disproving these baseless allegations. MultiPlan plays a vital role in helping to reduce healthcare costs across the entire healthcare ecosystem, benefiting payors, providers, employers and patients,” a MultiPlan spokesperson said.
MultiPlan works as an intermediary that has traditionally focused on helping insurers and providers agree on pay rates for out-of-network claims. It has developed a repricing tool that recommends appropriate pay for clinicians.
The complaint names large health insurance companies Centene, Cigna, CVS Health’s Aetna, Elevance Health, Health Care Service Corp., Humana and UnitedHealth Group as “co-conspirators,” though not as co-defendants, and alleges that MultiPlan is liable for their alleged conduct. HCSC declined to comment on the litigation. The other insurers did not respond to interview requests.
MultiPlan allegedly relies on claims data from the health insurers to power its repricing algorithm and to allegedly recommend carriers pay substantially lower rates to providers than they otherwise would, according to the complaint. MultiPlan also allegedly pushes providers to accept low rates through its large preferred provider organization, Community Health Systems claims.
MultiPlan allegedly retains a portion of the difference between the provider’s initial bill and the amount insurance companies pay, according to the lawsuit.
“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,” the complaint alleges.
By 2017, MultiPlan allegedly held agreements with the largest commercial insurers to allegedly use its re-pricing algorithm to suppress out-of-network rates, the complaint says. MultiPlan allegedly said in a 2018 study that providers accept its repriced rate for out-of-network inpatient services 99.4% of the time, according to the complaint.
The complaint also cites documents from MultiPlan's 2020 investor day, in which the company said it aimed to extend its reach to in-network pay. Community Health Systems also references in the complaint an April 2024 media interview with Dalton in which he said 98% of claims MultiPlan priced were accepted the previous year.
“MultiPlan shows no signs of stopping its cartel expansion efforts to in-network claims,” Community Health Systems said in its complaint.
Community Health Systems alleges that the strategy MultiPlan adopted after the passage of the No Surprises Act continues to reflect the allegedly collusive behavior. In response to the law, which went into effect in 2022, MultiPlan pivoted to helping insurers substantiate their recommended rates to federal mediators.
MultiPlan’s alleged conduct threatens Community Health Systems' bottom line, the lawsuit says.
Community Health Systems seeks to stop MultiPlan from working with insurance companies, reimbursement for the “hundreds of millions of dollars” MultiPlan's algorithm has allegedly shortchanged the hospital group and all other relief the court deems just.
“MultiPlan’s scheme has not only caused substantial injury to CHS; it has resulted in billions of dollars of annual underpayments to providers across the country, including rural hospitals and independent providers who critically rely on fair reimbursement for the care they provide. ... CHS looks forward to presenting its case to a jury," a spokesperson for CHS said.
The complaint cites a New York Times investigation published last month that detailed how MultiPlan and insurance companies reportedly benefit from offering lower reimbursement rates to health systems. The American Hospital Association called on the Labor Department to investigate MultiPlan, UnitedHealth and Cigna in response to the report. Sen. Amy Klobuchar (D-Minn.) also asked the Justice Department and Federal Trade Commission to investigate MultiPlan.
Lauren Berryman contributed reporting.
