Multiplan – Duane Morris Health Law

August 8, 2024 by Seth A. Goldberg

Health Insurance Reimbursement Price-Fixing MDL Formed

I recently reported that Multiplan and certain insurers in its network were accused of being a “cartel” that has agreed to underprice out-of-network reimbursement paid to providers in the Multiplan network in violation of federal antitrust laws. in the matter styled Live Well Chiropractic PLLC, et al. v. Multiplan, Inc., et al., (D. IL Civ. No. 1:24-cv–3680). That antitrust action, along with six other similar actions, were consolidated for pre-trial proceedings by the Joint Panel on Multi-District Litigation (JPML) into a multi-district litigation in the Northern District of Illinois before The Honorable Matthew Kennelly. See JPML Transfer Order.

While defendants in certain of the actions sought transfer of the MDL to the Northern District of California, and others hoped transfer would not occur until a motion to dismiss in an action in New York District Ct. was heard, the JPML ruled that ” the Northern District of Illinois is an appropriate transferee district for this litigation” because “six actions are pending in that district, which has the support of both some plaintiffs and all defendants. Two defendants are headquartered in Illinois, and several others are located nearby. Judge Matthew F. Kennelly is well-versed in the nuances of complex and multidistrict litigation, and we are confident he will steer this litigation on a prudent course.”

The price-fixing claims assert that Multiplan uses an algorithm that Multiplan claims “reprices” OON services based on historical reimbursements to providers providing the same services, and then “overrides” that amount to pay lower rates agreed upon by Multiplan and the insurers. The insurers, who are allegedly horizontal competitors, are claimed to provide competitively sensitive information about their reimbursement that they would not provide in a competitive market, and many serve on a Multiplan advisory board that meets in furtherance of the conspiracy to fix prices.

May 8, 2024May 8, 2024 by Seth A. Goldberg

Health Insurance Price-Fixing Cartel Alleged Against Multiplan and Insurers

Providers in a putative class action filed on May 7, 2024, claim that Multiplan and certain named insurers in its network are a “cartel” that has agreed to underprice out-of-network reimbursement paid to providers in the Multiplan network in violation of federal antitrust laws. The Complaint, filed in the District of Illinois as Live Well Chiropractic PLLC, et al. v. Multiplan, Inc., et al., (D. IL Civ. No. 1:24-cv–3680), alleges that Multiplan uses an algorithm that Multiplan clams “reprices” OON services based on historical reimbursements to providers providing the same services, and then “overrides” that amount to pay lower rates agreed upon by Multiplan and the insurers. According to the Complaint the insurers, who are allegedly horizontal competitors, provide competitively sensitive information about their reimbursement that they would not provide in a competitive market, and many serve on a Multiplan advisory board that meets in furtherance of the conspiracy to fix prices. A key component of the alleged price-fixing is Multiplan’s requirement that providers in its network agree not to balance bill patients for payments not made by the insurers. The Complaint alleges that Multiplan and the insurers have made billions off the alleged anticompetitive conduct, and seeks damages and injunctive relief.

April 29, 2024April 29, 2024 by Seth A. Goldberg

Does Multiplan Contract Leave Providers Exposed?

In the matter styled The Plastic Surgery Center, P.A., v. Cigna Health and Life Insurance, et al., (3d Cir. No. 23-1096), the Third Circuit Court of Appeals affirmed the District of New Jersey’s decision that the plaintiff provider, TPSC, could not recover against Multiplan for Cigna’s underpayment for breast reconstruction surgery under the commercial contract between TPSC and Multiplan.

Under that contract, TPSC agreed to become a member of Multiplan’s network of healthcare providers, and Multiplan agreed to use reasonable efforts to market to TPSC to payors who, like Cigna, contract with Multiplan to pay for services provided to Cigna’s insured’s by providers in Multiplan’s network. Under the TPSC/Multiplan contract, Multiplan agrees that provider will be paid 85% of charges, less deductibles, co-payments, and co-insurance. Cigna reimbursed TPSC approximately $2000 for a procedure for which TPSC charged approximately $158,000, and TPSC sued Cigna and Multiplan for the difference claiming Multiplan promised TPSC would be paid 85% of charges. In affirming the dismissal of that claim under basic principles of contract law, the Third Circuit determined that nothing in the TPSC/Multiplan contract guaranteed TPSC would be paid 85% of charges. The claims against Cigna had been dismissed by the trial court without appeal on the basis that the denial of any additional reimbursement was not arbitrary or capricious.

This may be an important to decision for the thousands of providers who have similar contracts with Multiplan, as payors may use it as a backstop for underpaying. This decision may be used to argue that a contract between the provider and Multiplan does not give a provider recourse to the payor for any underpayments or obligate Multiplan for them. However, the Third Circuit noted that TPSC did not claim the Multiplan contract was illusory.