A quarter of a century ago, the AMA fought to stop a major health insurance carrier from using a computer program to improperly underpay physicians for the services they provided to the health insurance company’s subscribers.
The New York state attorney general got involved too, and for a while the health insurer changed its ways. The state attorney general told the insurance company and others that they would provide data to an organization called FAIR Health that would decide what a fair out-of-network level payment would be. The state opened up the data to the general public so they would see what insurance companies were going to have to abide by.
Insurance companies followed the FAIR Health payment structure for out-of-network care. That is, until the agreement lapsed and they were no longer bound by the rules.
Then they figured out a way to pay less. To make shareholders happy and to prevent employers from switching from one health plan to another one that paid physicians fairly, the nation’s biggest health insurance companies decided they would all pay the same rate for out-of-network visits that their subscribers made, as described in an education session at the 2024 AMA Interim Meeting in Lake Buena Vista, Florida.
However, the companies couldn’t themselves get together and do that without violating federal law. Instead, they created MultiPlan, a separate data-analytics company that insurers could contract with to set the out-of-network rates.
There was a massive investigation in The New York Times about the company. The newspaper’s investigation was based on interviews with “more than 100 patients, doctors, billing specialists, health plan advisers and former MultiPlan employees,” along with a review of more than 50,000 pages of documents.
The five key takeaways from the paper’s investigation were that:
- The less that can be paid to physicians, the bigger the fees can be for insurers and MultiPlan.
- Patients could be on the hook for unpaid bills.
- Some physicians and other health professionals face big pay cuts.
- Employers get charged large and unanticipated fees.
- Private equity is backing both insurers and MultiPlan.
For its part, the AMA late last year joined the Illinois State Medical Society in suing MultiPlan Inc. in federal court in an effort to stop the practice. There are other lawsuits across the country challenging insurance companies.
Find out more about the cases in which the AMA Litigation Center is providing assistance and learn about the Litigation Center’s case-selection criteria.
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Asking federal court to intervene
The complaint—American Medical Association and Illinois State Medical Society v. MultiPlan Inc., which was filed in the U.S. District Court Northern District of Illinois—says that data-analytics company MultiPlan operates as an “unlawful cartel” for health insurance companies.
Roughly 700 of the nation’s 1,100 insurers, including the 15 largest health plans, use MultiPlan instead of independently setting their out-of-network payment rates. The practice amounts to “naked price-fixing” and it violates the Sherman Act, a federal antitrust law.
The complaint says that MultiPlan also violates the Sherman Act by, among other things, creating pricing agreements with payers that unreasonably restrain trade and agreeing with insurers to exchange extensive, current, confidential and competitively-sensitive pricing information with one another with the purpose of decreasing payments to physicians and health care organizations for out-of-network goods and services.
The lawsuit asks the court to stop MultiPlan from conspiring with insurers. In a recent Leadership Viewpoints column, AMA President Bruce A. Scott, MD, details how this lawsuit targets collusion in health care pricing.
More to come
More lawsuits are likely to be filed, according to experts who spoke at the session. That includes lawsuits that individual physicians are able to file against the system that has been underpaying them for their out-of-network services.
The AMA will work closely with state medical associations and national specialty societies and will contact state medical associations and specialty societies to find physicians who have been directly affected by MultiPlan’s activities. The AMA also is working to get a website up and running for physicians to access information and share their stories.
Read about the other highlights from the 2024 AMA Interim Meeting.
