A rural health system sued technology company MultiPlan and eight of the country's largest insurance companies over alleged schemes to strongarm providers into accepting low out-of-network rates.
At issue in the proposed class-action suit are MultiPlan's repricing tools, which allegedly rely on insurers' data to deflate their out-of-network reimbursement payments.
Related: How the surprise billing ban changes MultiPlan's business
MultiPlan acts as an intermediary between insurers and providers to help negotiate pay when a contract does not exist and protect patients from being "balance billed," or charged the difference between the hospital rate and insurer's allowed amount. The No Surprises Act, which went into effect in 2022, bans balance billing in most instances. MultiPlan also operates a large preferred provider organization, which it leases to insurers in areas where they lack a substantial provider network.
In its complaint filed in in the U.S. District Court of the Northern District of Illinois, Allegiance Health Management seeks an injunction to stop MultiPlan — along with Health Care Service Corp., CVS Health’s Aetna, Centene, Elevance Health, Cigna Group, Humana, Kaiser Permanente and UnitedHealth Group — from allegedly suppressing out-of-network reimbursement rates.
The for-profit hospital chain based in Bossier City, Louisiana, also seeks relief for damages associated with companies’ contracts and all other compensation the court deems just.
According to the complaint, the insurance companies allegedly agreed to share information regarding Allegiance and other providers’ out-of-network bills and commercial claims data with MultiPlan. All eight companies were allegedly onboard by July 2017, the complaint said.
"MultiPlan facilitated meetings between insurance executives so they could discuss using MultiPlan to suppress out-of-network insurance rates," the complaint said.
MultiPlan allegedly funnels the data into its repricing algorithms to generate a “ridiculously low” uncontracted rate and allegedly tells providers the rate will drop further if the repriced claim is not accepted within days, according to the lawsuit. MultiPlan allegedly retains a portion of the difference between the provider's initial bill and the amount insurers pay, the complaint said.
“Even if they had the time and resources for negotiations, MultiPlan would benefit from knowing that it repriced the claims as part of a nationwide conspiracy with its largest competitors, giving the providers nowhere to turn for relief,” Allegiance said in the complaint.
The proposed class-action lawsuit invites the “hundreds, if not thousands,” of other hospitals allegedly harmed by MultiPlan and large insurers to join.
MultiPlan and Health Care Service Corp., which manages Blue Cross Blue Shield plans in five states, declined to comment.
“While we cannot comment on pending litigation, Aetna has comprehensive networks of credentialed participating providers in every specialty who agreed to provide covered services at competitive negotiated rates,” an Aetna spokesperson wrote in an email. “We offer various options and strategies to help lower costs and minimize balance billing when members receive care from out-of-network providers, who would otherwise be subject to significantly higher rates.”
None of the other insurance companies responded to interview requests. Allegiance did not respond to requests for comment.
Earlier this month, the New York Times published an investigation detailing 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.
Hospitals have sued MultiPlan and insurers several times, making allegations that their agreements violate antitrust law and artificially lower providers’ out-of-network pay. Insurance companies have generally argued in response to the suits that providers refuse to work with them and charge sky-high rates for uncontracted care, leaving patients to foot the bill.
The debate strikes at the heart of the No Surprises Act, which requires insurers and providers that cannot agree on payment terms to work with federal negotiators to resolve disputes. In response to the law going into effect, MultiPlan announced a strategic pivot to focus on furnishing their data to help insurers substantiate their rates to federal mediators.
“Anecdotally, what we've heard is that a lot of the insurers didn't send that much data to support their offers [to federal arbiters], whereas the providers were doing a lot more, so that may change as we go forward,” said Loren Adler, fellow and associate director of the Center on Health Policy at Brookings Institute. That forced insurers to pay a higher rate to providers, he said.
During the first two quarters of last year, MultiPlan provided data to justify insurers' pay in 7.5% of the cases that went through the federal dispute process, according to data compiled by the Brookings Institute. Most of MultiPlan’s cases involved Cigna, Brookings said.
