AMA sues MultiPlan, alleging price-fixing scheme

AMA sues MultiPlan: ©Syahrir - stock.adobe.com

The American Medical Association and the Illinois State Medical Society (ISMS) filed a lawsuit October 24 in the Northern District of Illinois, accusing data analytics agency MultiPlan of being at the heart of a price-fixing scheme with commercial health insurers that allegedly restricts fair payment for out-of-network health care services and damages competition. According to the AMA, the lawsuit aims to hold MultiPlan accountable for what the plaintiffs describe as an “unlawful multilateral price-fixing scheme” that has been ongoing since approximately 2015, allegedly forcing physicians to accept significantly lower payment rates for out-of-network services, which often fall short of covering their operating costs.

The AMA and ISMS claim that this alleged conspiracy has pushed many medical practices, especially smaller ones, to close, stop offering certain services, or to shift employment models, resulting in fewer options for patients seeking medical care. According to AMA President Bruce A. Scott, M.D., these actions have benefited health insurance companies and their stakeholders at the expense of health care providers and patients.

“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,” Scott said in a statement. “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.”

A study by the Office of the New York State Comptroller published in April 2020 found that payments based on MultiPlan’s pricing methodology were significantly lower—ranging from 1.5 to 49 times less—compared to payments calculated using the traditional method for determining out-of-network reimbursement rates.

The court-appointed co-lead counsels -- Matthew Lavin, Hunter Shkolnik, and Christopher Seeger -- released the following statement:

“MultiPlan and major health insurers have orchestrated one of the largest price-fixing cartels in American health care history, systematically underpaying doctors and hospitals for out-of-network reimbursements while hitting patients with massive, unexpected bills and undermining access to care. By eliminating competition in the commercial reimbursement market, this cartel has devastated health care providers across America, particularly threatening the survival of rural and independent medical practices that millions of patients depend on. We are proud to represent the American Medical Association and state medical societies across the country in this landmark antitrust action to hold these companies accountable.”

ISMS President Piyush I. Vyas, M.D., expressed support for the lawsuit, stating, “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. This activity has resulted in below-market reimbursement rates paid to physicians for out-of-network health care 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 health care they deserve, and that physicians and other health care professionals are compensated appropriately for the important care they provide.”

According to the lawsuit, MultiPlan has a financial incentive to lower payment rates, as it charges insurers a fee based on the amount saved when reducing payments on physician claims. MultiPlan’s revenue from its repricing services has reportedly surged from $23 million in 2012 to $709 million in 2021.