CHICAGO — The American Medical Association (AMA) and the Illinois State Medical Society (ISMS) filed a lawsuit (PDF) today against MultiPlan claiming the data analytics agency is at the center of a price-fixing conspiracy with commercial health insurance companies that has undercut fair payment for out-of-network health care services and eliminated market competition resulting in harm to patients and physicians.

The lawsuit filed in the Northern District of Illinois, seeks to hold MultiPlan accountable for its role in an unlawful multilateral price-fixing scheme that has operated roughly since 2015 and has forced physicians to accept increasingly low payment amounts for out-of-network services, which often do not cover their operating costs. This widespread conspiracy has forced many medical practices, particularly smaller ones, to shut their doors, cease offering certain services, or seek other employment arrangements, leaving patients with fewer and fewer medical practice options.

“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,” said AMA President Bruce A. Scott, M.D. “Patients today are fed up with a dysfunctional health system – lengthy waits to see physicians, network inadequacy, and rising costs. What this lawsuit makes plain is that while many in our health system are striving for improvement, MultiPlan is profiting from price fixing. This is one more example of insurance companies playing by their own rules without regard to patients or the legitimate costs required to care for them.”

According to an April 2020 study published by the Office of the New York State Comptroller, depending on the service provided, payments based on MultiPlan’s repricing methodology were 1.5 to 49 times lower than payments for the same services based on the traditional method of calculating out-of-network payment rates for physicians. 

“The Illinois State Medical Society strongly supports and joins the AMA’s effort to fight this price-fixing collusion by MultiPlan and the major health insurance companies,” said ISMS President Piyush I. Vyas, M.D. “This activity has resulted in below market reimbursement rates paid to physicians for out-of-network healthcare services. The lack of transparency on how these fees are calculated along with the payment structure needs to be fixed. This will ensure patients can afford the healthcare they deserve, and that physicians and other healthcare professionals are compensated appropriately for the important care they provide.”

MultiPlan has a direct economic stake in suppressing out-of-network payment rates below fair levels. For each claim it reprices, MultiPlan receives a fee from the insurer based on a percentage of the difference between the initial claim amount and what the insurer pays. In other words, MultiPlan gets paid more as physicians get paid less. The revenues generated by MultiPlan from its repricing services have increased from $23 million in 2012, to $564 million in 2020 and $709 million in 2021.

“Through our lawsuit, the AMA and ISMS seek injunctive reform for the out-of-network payment systems used by virtually all commercial health insurers by ending their dependence on the MultiPlan scheme,” said Dr. Scott.