The American Medical Association (AMA) and Illinois State Medical Society (ISMS) have filed a federal lawsuit against cost-management firm MultiPlan, alleging the company is orchestrating an extensive price-fixing scheme to suppress physician reimbursement rates for out-of-network care.
Filed Thursday in the U.S. District Courts for the Northern District of Illinois, the lawsuit contends that MultiPlan has been working with major health insurers since at least 2015 to drive down payments to healthcare providers, often below operating costs, which has forced many practices to limit services or close entirely.
According to the AMA’s filing, the alleged conspiracy artificially deflates reimbursement rates, leaving providers to accept payments that are significantly below market rates for necessary services. This latest legal action against MultiPlan is part of a broader scrutiny by Congress into the company’s business practices, though MultiPlan denies the allegations.
Impact on Physicians and Patients
AMA President Dr. Bruce A. Scott emphasized that MultiPlan’s alleged pricing tactics undermine fair payment structures for physicians and lead to higher out-of-pocket costs for patients. “MultiPlan’s pricing scheme does not save patients money; instead, it benefits insurers and executives while increasing insurance premiums,” Dr. Scott stated. “This lawsuit aims to dismantle a harmful system that prioritizes profit over patient access to care.”
A 2020 report by the New York State Comptroller found that reimbursement rates based on MultiPlan’s methodologies ranged from 1.5 to 49 times lower than traditional rates for similar out-of-network services. This disparity, AMA asserts, significantly limits patients’ access to needed care by driving healthcare providers out of the market.
ISMS Support and Need for Transparency
ISMS President Dr. Piyush I. Vyas has also expressed the society’s support, calling for greater transparency in how insurers determine payment rates. “This lawsuit shines a light on a payment structure that harms both patients and providers by restricting access to necessary care and keeping physician compensation below sustainable levels,” Dr. Vyas remarked.
MultiPlan’s Financial Incentives
The lawsuit highlights MultiPlan’s financial interest in suppressing reimbursement rates. MultiPlan charges insurers a fee based on the reduction between the initial claim and the final payment—profiting as provider compensation diminishes. MultiPlan’s revenue from these services surged from $23 million in 2012 to over $700 million in 2021, the lawsuit reveals.
In seeking an injunction, AMA and ISMS aim to reform out-of-network payment systems and curb insurers’ reliance on MultiPlan’s pricing strategies. Dr. Scott concludes, “This lawsuit aims to hold MultiPlan accountable and protect the healthcare providers that patients depend on for critical care.”
