AMA and ISMS File Lawsuit Against Multiplan’s Price Fixing Scheme
November 1, 2024
Multiplan increased its profit levels about 30 times in under a decade – on the backs of doctors!
The American Medical Association (AMA) and ISMS filed a lawsuit against MultiPlan claiming that it was behind a multilateral price-fixing conspiracy with commercial health insurance companies. The scheme resulted in below market reimbursement rates paid to our hard-working physicians for out-of-network healthcare services.
Most of the nation’s insurers – roughly 700 out of 1,100 total (about 63%) – and all 15 of the largest health insurers now outsource their rate-setting function to MultiPlan, a data analytics agency located in Manhattan. The agency helps these health insurers determine how much they should reimburse doctors and other healthcare professionals who deliver services to patients out-of-network.
The revenues generated by MultiPlan from repricing services have increased from $23 million in 2012, to a whopping $564 million in 2020 and an astounding $709 million in 2021.
Here’s how the scheme works: 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 their lawsuit, the AMA and ISMS allege that most of the nation’s health insurance companies have outsourced to MultiPlan and that the agency undercut fair payment and eliminated market competition between insurers for out-of-network services. This repricing is what drove “artificially” low reimbursement.
Multiplan’s price-fixing conspiracy, which started around 2015, can also indirectly suppress in-network reimbursement rates because doctors receiving low out-of-network rates have less leverage to negotiate in-network reimbursement rates with health insurers.
“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. “The lack of transparency on how these fees are calculated along with the payment structure needs to be fixed.”
Physicians and other healthcare professionals must be compensated appropriately for the important care they provide!
If you have questions, please contact the ISMS Legal Division by email.