A ‘cartel' for insurers? AdventHealth sues MultiPlan over price fixing
Hospital system AdventHealth has filed a lawsuit against MultiPlan, alleging the cost-management firm has systematically underpaid hospitals and doctors at least $19 billion per year for out-of-network reimbursements.
Hospital giant AdventHealth is suing MultiPlan, alleging that the cost-management firm works with health insurers to systematically underpay for out-of-network medical claims.
Providers have lost at least $19 billion annually as a direct result of anticompetitive agreements with major payers, including UnitedHealth, Aetna, Elevance, Centene, Cigna, Humana and several Blue Cross Blue Shield insurers, the suit claims. MultiPlan called the lawsuit, which was filed last week in the U.S. District Court for the Southern District of New York, meritless.
Health insurers pay MultiPlan a fee to rent the company’s provider networks, allowing them to use the payment rates that MultiPlan has negotiated. Payers also contract with MultiPlan to use its technology to reprice medical claims from out-of-network hospitals and doctors, according to the suit. AdventHealth, which operates 50 hospitals across the U.S., alleges that MultiPlan uses its “repricing algorithms” to deflate out-of-network claim reimbursements, resulting in underpayments for 370,000 claims daily for more than 700 health insurers in 2020.
“‘Reprice’ is a euphemism,” the lawsuit said. “What these products really do — and what they are designed to do — is calculate a reimbursement amount for out-of-network health-care services that is far less than the insurance company would otherwise pay and far less than the health-care provider’s claim for reimbursement.”
MultiPlan takes a cut of the money that health insurers withhold from providers under this practice, which incentivizes the company to recommend the lowest reimbursement price possible, the lawsuit said. Advent Health is seeking damages for the alleged underpayments and lost revenues, which it estimates as hundreds of millions of dollars. It claims to have “overwhelming direct evidence” of MultiPlan’s allegedly anticompetitive contracts, including regulatory filings.
“MultiPlan knows it can get away with acting, in the words of an analyst, ‘like a mafia enforcer for insurers,’ because virtually every commercial health-care payor has agreed to use its repricing methodology, leaving health-care providers with no practical option but to accept the ‘repriced’ reimbursement amount that MultiPlan imposes,” the lawsuit said.
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AdventHealth is seeking an order permanently banning MultiPlan from operating the “cartel” moving forward, along with damages for underpayments and lost profits. MultiPlan told Healthcare Dive that it “believes this lawsuit has no merit and looks forward to disproving these baseless allegations.”
The lawsuit is indicative of the perennial tug of war between providers and insurance companies over pricing, which often leaves patients caught in the middle with high unexpected medical bills.