(AP Photo/Jessica Hill, File)
Zelis Healthcare LLC, a health care cost management company, and major health insurers were accused in multiple antitrust class actions of working together to suppress payments to out-of-network medical providers.
Aetna Inc., The Cigna Group, Elevance Health Inc., Humana Inc., Zelis Claims Integrity LLC, Seliz Network Solutions and Zelis Healthcare face putative class action allegations in the Northern District of California, the District Court of Massachusetts and the District Court of Kansas.
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The most recent case was filed in the U.S. District Court for the Northern District of California on Wednesday by Danny Bachoua Chiropractic, which performs out-of-network chiropractic treatments and often submits claims to insurers to receive payment. This complaint surfaced on Law.com Radar.
In a nearly identical complaint to the suit filed in Massachusetts, Danny Bachoua Chiropractic claimed Zelis and insurers illegally agreed to communicate and coordinate ways to depress payments for out-of-network providers.
The suit alleged Zelis is a third-party, private-equity owned “repricer” that uses databases and other technologies, like artificial intelligence, to determine pricing.
“Absent a conspiracy, the [health insurers] would be fiercely competing,” the plaintiff claimed. “A particular Commercial Payer would be working to persuade providers to perform healthcare services for it, so that, in turn, their insurance products would interest employers and other consumers. Instead, under the alleged payment suppression conspiracy, Zelis and [insurers] seek—and most often obtain—substantial discounts, including those as large as 98% off of provider invoices.”
The class action was filed Cotchett, Pitre & McCarthy attorneys Adam Zapala, Elizabeth Castillo and Christian Ruano. Counsel for the proposed class did not respond to a request for comment.
But Zelis argued the complaint lacks “foundation in fact or law.”
“They are mistaken about the identity of Zelis’s clients, the operation of Zelis’s solutions, and the benefits Zelis provides to patients, providers, and health plans,” the Zelis press office said. “Zelis provides highly customizable solutions that our clients leverage independently. Nothing about any of Zelis’s solutions is unlawful.”
The company further said it “looks forward to prevailing in court.”
While these lawsuits are just beginning, a similar trend of antitrust lawsuits were filed against MultiPlan Inc., which is a health care technology and cost management company like Zelis. The thread of class actions are pending in the Northern District of Illinois.
In January, MultiPlan moved to dismiss the class actions.
“Managed care organizations and third-party administrators do not dictate how much providers are paid for medical services provided to patients by out-of-network providers,” MultiPlan claimed. “There is no separate reimbursement product, price, or market for out-of-network services. And managed care organizations/third-party administrators did not agree to fix prices in plaintiffs’ imaginary out-of-network reimbursement market merely by using common data sources.”
The plaintiffs pushed back and claimed, “it is black letter law that buyers’ cartels resulting in payment of artificially low prices to suppliers violate Section 1” of the Sherman Act.
U.S. District Judge Matthew Kennelly of the Northern District of Illinois has not ruled yet on MultiPlan’s motion to dismiss.
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