The American Medical Association and the Illinois State Medical Society have filed a lawsuit against MultiPlan alleging the data analytics firm is colluding with with commercial payers in a price-fixing scheme that has "undercut fair payment for out-of-network health care services and eliminated market competition, resulting in harm to patients and physicians."
The lawsuit, filed in the Northern District of Illinois federal court, seeks to hold the company accountable for its alleged role in an unlawful, multilateral price-fixing scheme that has forced physicians to accept increasingly low payments for out-of-network services that often do not cover their operating costs, according to an Oct. 24 AMA news release.
AMA President Bruce Scott, MD, said that through their lawsuit, the AMA and ISMS are seeking "injunctive reform for the out-of-network payment systems used by virtually all commercial health insurers by ending their dependence on the MultiPlan scheme."
"What this lawsuit makes plain is that, while many in our health system are striving for improvement, MultiPlan is profiting from price fixing," Dr. Scott said in the release. "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."
The lawsuit from AMA and ISMS is the latest in a series of lawsuits that has been filed against MultiPlan making similar allegations.
Franklin, Tenn.-based Community Health Systems, Altamonte Springs, Fla.-based AdventHealth and Shreveport, La.-based Allegiance Health Management are among those that have filed lawsuits against the data analytics firm. In its May 8 filing, CHS alleged, "MultiPlan has created, and continues to orchestrate, an ongoing cartel agreement with competing health insurance companies throughout the United States to bilk healthcare providers out of billions of dollars per year."
The lawsuits filed by the three health systems, along with suits from three other providers, were centralized Aug. 1 in an Illinois federal court. A federal judge said in the order that the centralizing of the lawsuits "will serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation."
Additionally, a lawsuit filed by the liquidating trust for Redwood City, Calif.-based Verity Health was dismissed in August by a California Superior Court judge. The lawsuit, filed in 2021, accused MultiPlan of forging a "hub, spoke and rim" agreement with major payers to artificially reduce out-of-network reimbursement for providers. MultiPlan then allegedly received a cut of money saved on the lower reimbursement rate.
The superior court judge sided with MultiPlan's argument that reimbursement rates are not prices that can be fixed under the Cartwright Act. The judge also found that Verity did not sufficiently allege unlawful exchange of competitively sensitive business information.
A MultiPlan spokesperson said in a statement shared with Becker's that the company "plays an important role in our healthcare system by helping lower out-of-pocket costs, reducing or eliminating medical bills for millions of patients, and helping generate millions of dollars in healthcare cost savings."
"This is another copycat lawsuit of dozens filed by the same plaintiffs’ counsel, all of which are before the same judge handling the multidistrict litigation in the Northern District of Illinois," the statement said. "We have consistently stated that these lawsuits are without merit and would ultimately increase prices for patients and employers."
The spokesperson said the company plans to "vigorously defend against these meritless claims in the multidistrict litigation."