Elevance, UnitedHealth among insurers accused of alleged price fixing
The complaint claims the scheme was aimed at suppressing payment rates to doctors for out-of-network services.
Photo: John Fedele/Getty Images
Orthopedic providers have filed a lawsuit against Elevance, UnitedHealthcare and other insurers alleging they entered a multibillion-dollar price-fixing scheme with MultiPlan.
The complaint claims the scheme was aimed at suppressing payment rates to doctors for out-of-network services.
The complaint, filed Monday in federal court in Illinois, requests class action status, a jury trial, a determination that the conduct is unlawful and a judgment requiring payment.
Full defendants include: MultiPlan, Aetna, BSCA, BCBSMI, Blue Cross Blue Shield of Minnesota, Cambia, Centene, Cigna, Elevance, HCSC, Highmark, Horizon, Humana, Kaiser, Molina, United, Allied National, Benefit Plans Administrators, Central States, Consociate Health, Healthcare Highways and Secure Health.
WHY THIS MATTERS
The plaintiffs, Advanced Orthopedic Center and Dr. Curtis F. Robinson, dba Panoramic Medicine, allege there is a "cartel among insurance companies" with MultiPlan.
Out-of-network claims are submitted to the insurer not based on a pre-negotiated, discounted rate, but based on the provider's retail charge for the service performed, the complaint said.
Patients in a PPO, a preferred provider organization are able to see out-of-network providers and get covered for some of the service costs. Insurers have incentive for providing PPO plans.
"However, each insurer's unilateral interest in competing for out-of-network healthcare services (to avoid subscriber and provider loss) conflicts with insurers' collective interest in reducing overall out-of-network payments to providers. This presents what is known as a collective action problem," the lawsuit said. "The MultiPlan Cartel allows insurers to overcome this collective action problem, albeit in violation of the antitrust laws. Rather than setting their out-of-network compensation rates independently, most of the nation's insurers – roughly 700 out of about 1,100 total (including all 15 of the largest insurers) – now outsource this rate-setting function to a common entity, MultiPlan."
Insurers give MultiPlan real-time, and competitively sensitive information, including data concerning the amount they pay providers for in- and out-of-network services, and their internal pricing strategies and preferences, the complaint said. This enables the suppression of industry-wide out-of-network compensation rates paid to providers, the plaintiffs said.
"MultiPlan purports to determine out-of-network compensation rates 'algorithmically' through a proprietary program called 'Data iSight.' But Data iSight is little more than a technological smokescreen for traditional price-fixing," the complaint said.
THE LARGER TREND
The revenues generated by MultiPlan from its repricing services have gone from $23 million in 2012 to $564 million in 2020 and $709 million in 2021, according to the complaint.
Email the writer: SMorse@himss.org
