MultiPlan and eight large insurers shared an algorithm designed to drive up out-of-network costs and reduce payments to doctors and hospitals, the state of Arizona alleged in a lawsuit filed on Monday.
"MultiPlan and major insurance companies across Arizona allegedly conspired to keep payments to providers low in a scheme to pad their profit margins," Attorney General Kris Mayes said. "By using a shared algorithm to set payments, these companies harmed doctors and patients alike -- driving up patients' risk of paying more out‑of‑pocket costs, depriving providers of fair payment and sometimes forcing them to accept payment below the costs incurred for treatment, and making it harder for Arizonans to get the care they needed. This case is another example of old-fashioned price-fixing using new technology, but it's against the law all the same."
Along with MultiPlan, the lawsuit names Aetna, Cigna, UnitedHealthcare, Humana, Elevance, Molina, Centene and Health Care Service Corp. Instead of competing or setting payments independently, they allegedly used the same formula and data. Payment negotiation decisions were delegated to MultiPlan, resulting in extremely low payments across the industry that continued to decrease over time. This system produced unreasonably low payments for each medical code, regardless of where the out-of-network care was delivered or who provided it.
Providers across states and insurers received payments calculated by the same algorithm that was designed to underpay them, meaning competition effectively disappeared.
Insurers supplied their internal claims and payment data to MultiPlan, which pooled and used it to power the algorithm and keep the entire industry paying low amounts. Each artificially low reimbursement was fed back into the algorithm, pushing future payments even lower. This harmed both providers and patients:
- Doctors who challenged low payments faced MultiPlan employees whose bonuses relied on low payments and who used aggressive pressure tactics to force acceptance. Underpayments pushed providers to cut services especially, those in already vulnerable communities.
- Because insurers paid so little, some patients, who already paid higher premiums specifically for out‑of‑network coverage, were stuck with large medical bills.
These actions violated both the Arizona Uniform State Antitrust Act and the Arizona Consumer Fraud Act, Mayes said. The state is asking the court to stop the scheme through a permanent injunction; return money to patients, providers and employers who were harmed; force MultiPlan and insurers to surrender profits earned through the unlawful conduct; and impose civil penalties for violations of Arizona antitrust and consumer‑protection laws.
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