The American Medical Association (AMA) and Illinois State Medical Society (ISMS) filed a lawsuit on October 24, 2024, against data analytics agency MultiPlan in the Northern District of Illinois. The lawsuit alleges MultiPlan is at the center of a price-fixing conspiracy with commercial health insurance companies that has undercut fair payment for out-of-network healthcare services since approximately 2015.
According to an April 2020 study by the New York State Comptroller's Office, payments based on MultiPlan's repricing methodology were 1.5 to 49 times lower than payments for the same services using traditional out-of-network payment calculations. The lawsuit claims this multilateral price-fixing scheme has forced physicians to accept payments that often do not cover their operating costs, while insurance costs continue to rise for patients.
The company's financial records showed revenue growth from repricing services increased from $23 million in 2012 to $564 million in 2020, reaching $709 million in 2021. MultiPlan receives compensation based on a percentage of the difference between initial claim amounts and final insurer payments, meaning the company earns more as physician payments decrease.
The lawsuit states that medical practices, particularly smaller ones, have been forced to shut their doors, cease offering certain services, or seek alternative employment arrangements. These changes have reportedly resulted in reduced patient access to care and network coverage issues.
"MultiPlan's pricing scheme does not generate any savings for patients. The cost of health insurance keeps going up, while the payors, their investors, and their executives profit from money that should have rightfully been paid to doctors providing necessary medical care," stated AMA President Bruce A. Scott, MD in a press release.
ISMS President Piyush I. Vyas, M.D., cited concerns about "the lack of transparency on how these fees are calculated along with the payment structure," noting that the activity "has resulted in below market reimbursement rates paid to physicians for out-of-network healthcare services."
The lawsuit seeks injunctive reform of out-of-network payment systems used by virtually all commercial health insurers by ending their dependence on the MultiPlan scheme.
Reference:
American Medical Association. AMA, ISMS antitrust lawsuit seeks to break MultiPlan price fixing cartel. Published October 24, 2024. Accessed October 29, 2024. https://www.ama-assn.org/press-center/press-releases/ama-isms-antitrust-lawsuit-seeks-break-multiplan-price-fixing-cartel