A California Superior Court judge dismissed a lawsuit from a bankrupt health system accusing the data analytics firm MultiPlan and national insurers of using their influence to deny providers billions of dollars since 2012, according to an Aug. 9 court filing.
The liquidating trust for Redwood City, Calif.-based Verity Health filed the lawsuit against MultiPlan in 2021. The lawsuit 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.
Verity Health declared bankruptcy in 2018, selling business assets through much of 2020.
The lawsuit alleged that MultiPlan's practices violated California's Cartwright Act and Unfair Competition Law and cost providers, including Verity, a collective $10 billion annually since 2012.
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.
Allegations made by Verity are similar to those made in more recent federal proposed class-actions against MultiPlan in federal court by health systems and other providers.
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 lawsuit, 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."
A MultiPlan spokesperson told Becker's in a statement, "We have consistently stated that these lawsuits are without merit and would ultimately increase prices for patients and employers. We were pleased to see that last Friday the Superior Court of California granted MultiPlan’s motion to dismiss against the Verity Health System Liquidating Trust, in a case raising antitrust claims similar to those in the multidistrict litigation in the Northern District of Illinois."