Senators see possible conflicts of interest in health care pricing tools

The chairs of two Senate committees that oversee health policy, concerned that companies are “increasing their profits” at the expense of patients, are examining the practices of a data analytics firm that partners with large insurers to cut payments to providers of health services.

The company, MultiPlan, recommends fair payments for medical care, but the company and insurers can collect higher fees when payments are lower. This business model could “give rise to an improper conflict of interest,” the chairmen of the two committees, Ron Wyden of Oregon and Bernie Sanders of Vermont, wrote in a letter to the company's CEO published Tuesday.

The senators invited MultiPlan to meet with committee staff to discuss a New York Times investigation last month that found the company's pricing tools may be leaving patients with unexpectedly high bills when they see doctors outside of networks of their health plans.

“Our committees are committed to ongoing legislative work to end plan provider practices that increase health care costs for consumers while inflating their profits,” reads the letter to Travis Dalton, CEO of MultiPlan.

In a statement, MultiPlan said it is working with Senate committees “to answer their questions and explain the costs and complexity patients may face” when choosing expensive care outside their networks. “We are committed to helping make healthcare transparent, fair and affordable for all,” the statement reads.

The commissions' investigation reflects growing scrutiny of the New York-based company, which has remained largely out of the spotlight even as it has gained a dominant position in a lucrative health care sector.

Another senator, Amy Klobuchar of Minnesota, this month asked federal antitrust regulators to investigate whether insurers and MultiPlan were conspiring to fix prices, and several health systems have sued the company, accusing it of such behavior anti-competitive.

Separately, the Labor Department said Tuesday that it has “a number of open investigations” into the type of pricing services provided by MultiPlan, but declined to name specific companies. The agency, the primary regulator of employer-based health insurance, emphasized in a statement that companies are legally obligated to ensure that companies that process medical claims act in the best interests of their employees.

The letter from Mr. Wyden, a Democrat, and Mr. Sanders, an independent, also raises attention on employer-based health insurance, which is the most common way Americans get coverage and a major component of MultiPlan activities.

As health care costs rise, some employers are taking a closer look at what they pay insurance companies to administer their plans, but they are often frustrated by contracts that limit access to their claims data . To address this problem, a bipartisan group of senators, including Sanders, introduced legislation in December that would require insurers to provide this data.

“Most companies do their best to manage the ever-increasing costs of their group health plan, but it should be easier,” Sen. Mike Braun, a Republican from Indiana and a cosponsor of the bill, said in a statement.

Most employers choose to pay medical claims out of their own money and use an insurer to administer their plans. This setup, known as “self-funding,” can be profitable for insurers like UnitedHealthcare, Cigna and Aetna, as well as specialty companies like MultiPlan.

Insurers pitch MultiPlan's tools as a way to save employers money when their employees see a health care provider outside the plan's network. Bills for these out-of-network providers are subject to negotiation, and insurers often send claims to MultiPlan, which recommends an amount to pay.

Both MultiPlan and insurers typically collect a commission from the employer based on the size of what they call the “savings”: the provider's list price minus the recommended payment. Lower payouts can mean higher fees. Meanwhile, patients can be stuck with unpaid balances, the Times investigation found.

Companies are legally obligated to ensure that insurers act in the best interests of employees, and a closely watched lawsuit filed last year could force them to become more active monitors.

A Johnson & Johnson worker is suing the company, claiming it failed to adequately supervise the administrator of his drug benefit plan. By paying too much — in one case, $10,000 for a drug that was available for just $28.40 — the company had allowed the administrator, Cigna Express Scripts subsidiary, to profit at the expense of employees, the lawsuit alleged.

In a statement, Johnson & Johnson called the claims “meritless” and said: “We are committed to our employees and seek to provide the best coverage.”

A small industry of consultants, lawyers and data analysts has sprung up to help companies step up monitoring and negotiate better deals with the insurers that administer their plans.

Kraft Heinz sued Aetna last year, alleging that the insurer improperly paid claims and withheld millions in undisclosed commissions. Administrators of a union health plan in Massachusetts sued Blue Cross Blue Shield of Massachusetts in 2021, accusing the insurer of repeatedly overpaying claims and then charging a fee to correct the errors. And in January the Department of Labor sued Blue Cross and Blue Shield of Minnesota, alleging that the company forced several employers to pay health care provider fees without making the allegations public.

(Aetna declined to comment on the case, but said it worked with employers “to facilitate access to quality, convenient and affordable health care.” Blue Cross and Blue Shield of Minnesota said the government's allegations were “meritless” and “based on unsupported interpretations” of the law.)

The success of employers' efforts sometimes hinges on an unresolved legal question: Does a company's duty to act solely in the best interests of its employees extend to insurers and companies like MultiPlan? The courts have reached different conclusions.

MultiPlan has argued that the answer is no, and in March a federal judge in California agreed, dismissing the company from a lawsuit brought by health care providers. The lawsuit against insurer Cigna was allowed to move forward.

In investor presentations, MultiPlan highlighted its murky legal obligations. Because the company does not provide insurance or pay compensation, it noted in a public filing, “we are generally not directly regulated and face significantly lower levels of regulatory complexity.”

Leave a Reply

Your email address will not be published. Required fields are marked *