MultiPlan Inc. is asking a federal court to dismiss a lawsuit that physicians filed to stop the company from conspiring with insurers to underpay physicians by billions of dollars, a system that is leading to fewer health care choices for patients.
The Litigation Center of the American Medical Association and State Medical Societies and the Illinois State Medical Society (ISMS)—which together filed the lawsuit against MultiPlan—tell the court that the motion should be denied. The complaint against MultiPlan, they say, has overwhelming evidence to support their grievance that the company is acting as an “unlawful cartel” for health insurance companies.
Physicians “have caught defendants red-handed. Unlike most antitrust cases where pleadings are built on supposition and inference, [plaintiffs] already have reams of direct evidence, including details of the contracts, meetings, and presentations that make up the cartel,” the AMA Litigation Center and ISMS explain in their response to MultiPlan’s request for dismissal.
They told the court that the initial court filing cites business documents, admissions and sworn testimony showing that defendants in the lawsuit violated antitrust laws because they:
- Previously competed on out-of-network pricing.
- Agreed to stop competing on out-of-network pricing.
- Directly harmed physicians and other health care providers through the agreement because they paid them billions of dollars less than they would have been paid, but for the cartel.
The plaintiffs’ “244-page, 847 paragraph complaint does far more than plead plausible antitrust and state law claims,” the AMA Litigation Center and ISMS say. The case, American Medical Association and Illinois State Medical Society v. MultiPlan Inc., was filed in the U.S. District Court Northern District of Illinois.
Further, they say that MultiPlan has raised no pleading-stage arguments to the contrary and urged the court to reject the fact-bound arguments they do raise. That is because, among other things, MultiPlan’s attorneys “rest their motion on their own alternative factual narrative” and “ignore the wealth of direct and circumstantial evidence showing the existence of a per se violation of the antitrust laws.”
Of note, in February MultiPlan rebranded itself as Claritev amid legal challenges that it is facing. The AMA Litigation Center and ISMS lawsuit is one of a number of other lawsuits across the country challenging insurance companies.
The U.S. Department of Justice has filed a statement of interest in the case—which is similar to an amicus brief—that points out legal errors in the defendants’ motion to dismiss.
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.
Why this must stop
Instead of setting their out-of-network payment rates independently, roughly 700 of the country’s 1,100 insurers use MultiPlan to set their rates. That includes the nation’s 15 largest health plans. MultiPlan’s revenues were $709 million in 2021, up from $564 million in 2020 and $23 million in 2012.
It’s a practice that amounts to “naked price-fixing,” violating the Sherman Act, a federal antitrust law, the AMA Litigation Center and ISMS lawsuit says, and it must stop.
The complaint says MultiPlan violates the Sherman Act by:
- Acting as the central hub while insurers are the spokes in a “hub-and spoke” conspiracy, that has “effectively stifled competition in the market for out-of-network treatment services.”
- Acting as an agent, facilitator and conduit to materially aid anticompetitive goals. Health plans delegated virtually all aspects of out-of-network pricing and payment to MultiPlan and MultiPlan helped insurers share confidential information with each other, making it easier for them to artificially suppress out-of-network rates.
- Creating pricing agreements with payors that unreasonably restrain trade.
- Agreeing with insurers to exchange extensive, current, confidential and competitively-sensitive pricing information with one another with the purpose of decreasing payments to providers for out-of-network goods and services.
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The practice has been going on since 2015, with payments set so low that they often don’t cover physicians’ operating costs. That has forced numerous medical practices, especially smaller ones, to close. Some other practices have stopped offering certain services. All of that is harmful for patients who need care, but have fewer choices to access it.
Physicians are “sitting ducks”
A decision on the motion to dismiss the lawsuit is expected in May or June. In urging the court to continue the lawsuit to move forward, the AMA Litigation Center and ISMS told the federal court that physicians and other health care professionals “are sitting ducks for the cartel.”
They explained that when physicians and others provide out-of-network services for a patient, they can only turn to a single payer for the services. Because of that, “the cartel can rip off providers on a massive scale,” the response says.
For example, it tells the court that in 2020, MultiPlan set prices for more than 370,000 out-of-network claims per day for more than 80% of the market. The result? A total underpayment of about $19 billion.
“These underpayments are gargantuan when compared to the prices that would have existed but for the cartel,” the response tells the court. “The cartel also harms patients by leaving providers with less money to invest in the availability and quality of care. The cartel harms health plan subscribers by charging them massive and bogus fees each time the cartel underpays a doctor. The cartel enriches defendants, while hundreds of providers are operating on the brink of insolvency.”
