The AMA’s Landmark Lawsuit Against MultiPlan

On October 24, the American Medical Association (AMA) and the Illinois State Medical Society (ISMS) filed a lawsuit in the Northern District of Illinois, accusing data analytics agency MultiPlan of collaborating with major health insurers in a scheme that has allegedly restricted fair reimbursement for out-of-network care since 2015. The lawsuit claims that this alleged price-fixing arrangement has driven down reimbursements for out-of-network healthcare providers to unsustainable levels, resulting in financial losses for many medical practices and reducing access to care for patients across the United States.  

The Allegations: MultiPlan’s Alleged Role in Price-Fixing Scheme 

According to the AMA, MultiPlan has operated at the center of a price-fixing scheme designed to restrict fair pay for out-of-network services by pushing physicians to accept lower reimbursement rates that, in many cases, do not cover their operating costs. Allegedly in collaboration with major health insurance companies, MultiPlan’s strategy has been to consistently reduce out-of-network reimbursement rates, allowing insurers to save money at the expense of healthcare providers. 

This lawsuit aims to hold MultiPlan accountable for actions that the AMA and ISMS describe as a violation of antitrust laws, claiming that this alleged conspiracy has harmed medical practices—particularly independent ones—across the country. For providers, this lawsuit signals an opportunity to challenge payment practices that, according to AMA President Bruce A. Scott, M.D., have not only financially burdened physicians but have also decreased patient access to essential healthcare services. 

Impacts on Providers: Financial Strain and Practice Closures 

One of the lawsuit’s core arguments is that MultiPlan’s alleged actions have placed a disproportionate strain on healthcare providers, with a significant impact on smaller and independent practices. Many practices, especially in rural or underserved areas, rely on out-of-network reimbursements to remain financially viable. When these rates fall far below what’s necessary to cover operating costs, practices are left with few options: 

1. Practice Closures: Providers unable to sustain themselves financially have been forced to close, leaving entire communities without access to essential services. 

2. Shifts in Employment Models: Many practices have shifted to employment-based models to survive, often resulting in less flexibility for physicians and potentially reduced quality of care for patients. 

3. Reduced Service Offerings: Some practices have opted to discontinue certain services that do not bring in sufficient reimbursement, further limiting care access for patients. 

The outcome of this lawsuit could have a major impact on the stability of independent medical practices and could potentially lead to more consistent reimbursement rates, making it more feasible for providers to offer comprehensive services without jeopardizing their financial well-being. 

The AMA’s Perspective: Advocacy for Fair Reimbursement 

The AMA and ISMS argue that MultiPlan’s practices benefit only insurers and their stakeholders while depriving providers of fair compensation and failing to create savings for patients. Dr. Scott emphasizes that MultiPlan’s pricing methodology not only undermines healthcare providers but contributes to a dysfunctional healthcare system where patients face prolonged wait times, rising costs, and inadequate network access. 

This lawsuit represents the AMA’s commitment to holding companies accountable for practices that compromise both providers’ and patients’ interests. According to Dr. Scott, the lawsuit is an important step toward establishing more transparency and equity in how out-of-network reimbursement rates are determined, ensuring that healthcare providers are fairly compensated for the care they deliver. 

A Call for Transparency and Fairness in Reimbursement Calculations 

Another central issue highlighted by the AMA and ISMS is the lack of transparency surrounding how MultiPlan and insurers calculate out-of-network rates. The AMA claims that without a clear methodology, providers are often left in the dark about how reimbursement levels are determined, making it difficult to plan for sustainable practice management. 

ISMS President Piyush I. Vyas, M.D., states that improved transparency is crucial for both providers and patients, as it would enable patients to understand what they are being billed for and would allow providers to predict financial outcomes more accurately. The lawsuit calls for a more standardized, equitable approach to reimbursement that accounts for the true costs of delivering quality care. 

Financial Incentives for Price Reduction 

MultiPlan’s business model reportedly includes a financial incentive to lower payment rates as much as possible. The company earns a fee from insurers based on the amount saved when it reduces payments on physician claims, creating a system where lowering out-of-network reimbursements directly benefits MultiPlan. According to the lawsuit, MultiPlan’s revenue from repricing services surged from $23 million in 2012 to $709 million in 2021, reflecting a substantial increase tied to this cost-saving mechanism. 

For providers, this aspect of the lawsuit is crucial, as it underscores the alleged conflict of interest where profit motives are directly tied to minimizing payments to healthcare providers. A successful outcome in this lawsuit could lead to significant changes in how repricing firms like MultiPlan operate, potentially decoupling their profits from reductions in physician reimbursement. 

Broader Implications for Providers and Patients 

The AMA and ISMS emphasize that this lawsuit has far-reaching implications not only for healthcare providers but also for patients who rely on fair reimbursement practices to access the care they need. Below are some potential outcomes and their implications: 

1. Higher Reimbursement Rates for Out-of-Network Providers: A ruling against MultiPlan could result in increased reimbursement rates for out-of-network services, giving providers more financial stability and enabling them to offer a wider range of services. 

2. Greater Transparency in Payment Calculations: The lawsuit’s focus on transparency could lead to more standardized methods for calculating out-of-network reimbursement rates, making it easier for providers to understand and anticipate their payments. 

3. Improved Access to Care for Patients: By challenging practices that allegedly reduce the number of available healthcare providers, the lawsuit could help restore patient access to care by making it financially feasible for providers to operate independently. 

4. Increased Regulatory Scrutiny: If the lawsuit is successful, it may pave the way for increased regulatory oversight of companies like MultiPlan and lead to new policies aimed at preventing similar alleged price-fixing practices in the future. 

What Providers Can Do Now 

While the lawsuit is still in its early stages, there are steps providers can take to navigate the complexities of out-of-network reimbursement: 

1. Stay Informed on Legal Developments: Providers should closely monitor the progress of this lawsuit, as any rulings or settlements could have direct impacts on reimbursement practices and policies. 

2. Consider Legal Representation for Reimbursement Disputes: If providers feel they are being underpaid for out-of-network services, consulting with legal experts specializing in healthcare reimbursement could help them understand their options. 

3. Advocate for Fair Reimbursement Policies: Joining professional organizations like the AMA or state medical societies can provide a platform for providers to advocate for policy changes that promote fair and transparent reimbursement practices. 

4. Review and Update Financial Strategies: For smaller practices especially, regularly reviewing financial models can help identify potential vulnerabilities in revenue streams and prepare for fluctuations in out-of-network payments. 

The AMA’s lawsuit against MultiPlan is a crucial moment in the ongoing fight for fair reimbursement in healthcare. As this legal battle unfolds, providers and patients alike stand to gain from a system where payments align more closely with the real costs of delivering care. By holding companies accountable for alleged price-fixing practices, the lawsuit aims to establish a more equitable and transparent reimbursement landscape, ultimately benefiting both the healthcare workforce and the communities they serve. 

For providers, this lawsuit is a reminder of the importance of advocating for fair compensation and staying engaged in broader policy discussions. The healthcare system can only be as strong as the physicians and professionals who support it, and fair reimbursement is a fundamental part of preserving the quality and accessibility of care across the United States.