Community Health Systems (CHS) recently filed a lawsuit against MultiPlan, alleging that MultiPlan conspired with health insurers to lower payments to CHS providers. MultiPlan is an intermediary between insurers and health care providers, used to determine reimbursement for out-of-network claims via repricing tools and other measures. In the lawsuit, CHS alleges that MultiPlan has colluded with several of the largest health insurance companies in the United States – including UnitedHealth, Cigna, and Humana – to unfairly lower provider pay.
Specifically, CHS alleges that MultiPlan used insurers’ claims data in its repricing algorithm, ultimately recommending insurers pay lower rates to providers than they otherwise would for out-of-network care. MultiPlan uses its large preferred provider organization to strongarm providers into accepting the lower payment rates by acting “’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.”
CHS alleges that the “MultiPlan Cartel” includes “virtually all of the major healthcare insurance payors in the United States,” resulting in “hundreds of millions of dollars” in damages to the health system. According to the lawsuit, MultiPlan had an agreement with nearly every “significant healthcare insurance payor” by 2017, paying out roughly 370,000 out-of-network claims each day by 2020.
“MultiPlan knows that, by bombarding healthcare providers with a constant stream of ‘repriced’ reimbursement demands, it is practically impossible for healthcare providers to meaningfully negotiate or pursue dispute resolution with respect to individual claims,” CHS alleges in the complaint. “Accordingly, 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.”
In the lawsuit, CHS notes that MultiPlan is planning to one day suppress in-network reimbursement claims as well, referencing a 2023 third quarter earnings call during which former CEO Dale White told investors that “[f]or 2024, we are shifting our attention to our network based services.”
More than Community Health Systems
The New York Times has also investigated MultiPlan, finding that the company is incentivized to lower reimbursement rates because it receives part of the difference between a provider’s bill and what is ultimately paid by insurance. The New York Times also alleged that MultiPlan would sometimes tell “insurers what unnamed competitors were doing.”
Senator Amy Klobuchar called on the Federal Trade Commission (FTC) and the Department of Justice (DOJ) to investigate MultiPlan for “potentially anticompetitive conduct.” Senator Klobuchar noted in her letter that “Algorithms should be used to make decisions more accurate, appropriate, and efficient, not to allow competitors to collude to make healthcare more costly for patients.”
Other Lawsuits
Florida-based AdventHealth and Louisiana-based Allegiance Health Management have sued MultiPlan over similar allegations. Those cases are still pending.