MultiPlan is facing another antitrust lawsuit from providers.
The American Medical Association alleges the data analytics firm worked with insurers to allegedly depress out-of-network physicians' pay. The Illinois State Medical Society is also named as a plaintiff in the suit, which was filed Thursday in the U.S. District Court for the Northern District of Illinois. The national and state medical groups accuse MultiPlan of allegedly violating the Sherman Act of 1890, which prohibits monopolies.
Related: AHA seeks federal probe of MultiPlan, insurers
The AMA and Illinois medical trade group want the court to state MultiPlan’s work with insurers is illegal and issue an injunction blocking MultiPlan from continuing to contract with carriers. Since it began working with insurers in 2015, MultiPlan has allegedly shortchanged providers by billions of dollars, according to the complaint.
“MultiPlan is profiting from price fixing. This is one more example of insurance companies playing by their own rules without regard to patients or the legitimate costs required to care for them,” AMA President Dr. Bruce Scott said in a statement.
MultiPlan did not immediately respond to an interview request.
The data analytics firm contracts with 700 large insurers, including UnitedHealth Group’s UnitedHealthcare, CVS Health’s Aetna and Cigna, to negotiate with out-of-network providers and reduce their charges to carriers, the complaint alleges. Because nearly every insurance company contracts with MultiPlan, the company allegedly sets the market rate for out-of-network services, the complaint reads.
The company relies on an in-house algorithm to help it determine the appropriate cost of medical services, but allegedly powers the tool with flawed data, such as the lower, in-network rates insurers pay providers, the complaint alleges.
MultiPlan is allegedly incentivized to lower providers' charges to insurance companies as much as possible, because it receives a cut from carriers of any savings achieved, according to the lawsuit. Providers often lack leverage to negotiate and are forced to accept MultiPlan's low rates or balance bill patients, the complaint alleges. The No Surprises Act of 2022 prohibits insurers and providers from balance billing consumers in most circumstances.
In addition to the technology service, MultiPlan operates a large preferred provider organization that it rents to insurers looking to expand their networks. The company allegedly convinces providers to join its PPO network by promising big reimbursements, but when insurers use the MultiPlan PPO they still allegedly categorize contracted providers’ payments as out-of-network and pay lower fees, according to the complaint.
The Thursday complaint also includes details of MultiPlan’s alleged relationship with UnitedHealthcare.
A 2020 short-seller report, which MultiPlan has refuted, alleged the insurer planned to end its contract with MultiPlan and instead transition to an in-house alternative named NaviGuard by 2023. MultiPlan allegedly convinced UnitedHealthcare to abandon its plans for NaviGuard by allowing the insurance company to pocket a larger portion of medical cost savings achieved, according to the lawsuit.
“MultiPlan’s willingness to sacrifice short-term profits [by taking smaller portions of cost savings] does not make economic sense absent its knowledge that perpetuating its conspiracy to underpay physicians would pay off in the long run,” the complaint reads.
Retaining UnitedHealthcare as a customer was critical for MultiPlan to maintain its market dominance and work with other insurers, the complaint alleges.
UnitedHealth Group did not respond to a request for comment.
Separate legal filings have alleged that UnitedHealthcare reinked its contract with MultiPlan because employer customers wanted to retain MultiPlan's services.
The claims in the AMA and Illinois medical association’s lawsuit echo allegations from other recent lawsuits by hospital chains Community Health Services of Franklin, Tennessee, Bossier City, Louisiana-based Allegiance Health Management and AdventHealth in Altamonte Springs, Florida.
Most of the lawsuits rely on information from a New York Times report published in April that investigated MultiPlan’s business model and insurer contracts. The story prompted the American Hospital Association and Congress to call on federal agencies to investigate MultiPlan’s operations.
Criticism of the company also hit its bottom line. In September, MultiPlan revealed scrutiny from lawmakers and legal challenges drove it to engage in conversations with debtholders about finding additional lenders.
Correction: An earlier version of this article incorrectly referred to the Illinois trade group as the Illinois State Medical Association.
