MultiPlan is in the legal crosshairs of another healthcare system over contracts and services provided to partner health plans that providers have described as collusive and anticompetitive.
The class-action complaint was filed last week in an Illinois district court by Allegiance Health Management, a Louisiana-based for-profit with more than a dozen hospitals that said it and others have suffered “massive economic losses” due to the practices.
The class action also names several major payers that work with MultiPlan to negotiate out-of-network bills with providers as co-defendants: CVS Health’s Aetna, Elevance Health, UnitedHealth Group, Centene, Humana and integrated health network Kaiser Permanente.
It echoes several allegations made last year in an ongoing suit from AdventHealth. It also speaks to several of the practices highlighted in a critical New York Times investigation, which spurred calls from the American Hospital Association for an immediate investigation of the company.
Specifically, Allegiance wrote that MultiPlan has worked since the mid-2000s to acquire and develop tools that ingest payers’ claims data “to generate a reimbursement rate far lower” than the benchmarks an individual insurance plan would be able to create for its negotiations alone.
To fuel the strategy, Allegiance wrote that MultiPlan cuts deals with the nation’s largest health plans in which they agree to feed their claims data into MultiPlan’s repricing tools and pay MultiPlan processing fees. Some of MultiPlan’s processing fees are negotiated as a portion of the reduced reimbursement rate, giving the company an incentive to “suppress payments to providers,” the plaintiff wrote.
“MultiPlan boasts that its repricing tools generate billions of dollars annually in ‘savings’ by forcing providers to accept 61-81% underpayments on their out-of-network reimbursement claims,” Allegiance wrote. “… MultiPlan has massively profited from this strategy. So too have the insurance companies that conspire with it.”
MultiPlan’s repricing business drove $22.9 billion of “underpayments” to providers in 2023 alone, according to the complaint.
Allegiance went on to note that MultiPlan’s other business operating several preferred provider organizations (PPOs) makes it a direct competitor with the other plans listed in the suit. It wrote that the cross-company data sharing practices recall those employed nearly two decades ago by UnitedHealth Group subsidiary Ingenix, which fueled a New York attorney general investigation and subsequent litigation and settlements to unwind.
The complaint cites investor presentations and Securities and Exchange Commission filings as “direct evidence” that MultiPlan and the other defendants were aware they were corking with their top competitors. Allegiance alleged that the business arrangements meet the bar for “multiple” violations of federal antitrust law, such as by engaging in “a horizontal hub-and-spoke conspiracy” and unreasonably restraining trade.
MultiPlan said via a spokesperson that it is declining to comment on the litigation at this time.
Allegiance is seeking to recover damages for itself and class members. However, the system did not specify the full amount of damages it has sustained under the alleged anticompetitive practices, which would have affected out-of-network services it provides at all of its locations. Instead, the for-profit wrote in the complaint that it would calculate the total “after discovery” and go on to prove the damages at trial.