Big health insurance companies are collaborating with little-known data companies to boost profits, often at the expense of patients and doctors, a New York Times investigation has found. A private equity-backed company called MultiPlan has reduced payments to health care providers and helped drive up patient bills, earning billions of dollars in fees for itself and insurance companies. .
To investigate this largely hidden side of the health care industry, The Times interviewed more than 100 patients, physicians, billing experts, health plan advisors, and former MultiPlan employees and published two federally published reports. More than 50,000 pages of documents, including confidential records, were reviewed. The justices, following a petition from the Times.
Here are five points.
The less you pay your doctor, the more fees your insurance company and multiplan will charge
When a patient sees a provider outside of their plan's network, UnitedHealthcare, Cigna, Aetna, and other insurance companies often send a bill to the multiplan recommending how much to pay.
MultiPlan and insurance companies have a strong incentive to keep payments low, as the lower you pay, the higher the fees.
Here's how it works:
The most common way Americans buy health insurance is for employers to pay for their workers' health care themselves and use an insurance company to administer the plan. Providers in your plan's network have agreed-upon rates, while out-of-network providers often have to negotiate payments.
Insurers claim they are saving employers money by taking advantage of multiplan frugal recommendations. But insurance companies and multiplans also benefit. That's because insurance company and multiplan fees are typically based on the size of the declared “savings” or “discount” – the difference between the original bill and the amount actually paid.
In some cases, insurance companies and multiplans may collect more money for processing claims than the provider receives for treating the patient.
UnitedHealthcare, the nation's largest insurance company by revenue, has earned about $1 billion a year in fees in recent years from out-of-network savings programs, including partnerships with MultiPlan, according to legal testimony.
Patients may find themselves stuck paying unpaid bills.
Since insurance companies started forwarding claims to multiplans, patients are seeing higher bills as providers bill unpaid balances.
As a result, some patients say they have scaled back or stopped long-term treatment. The predicament can be especially tough for people who rely on out-of-network professionals, such as mental health or substance abuse treatment.
Patients have limited recourse. If you wish to sue, you typically must first complete the administrative appeals process, and even if your case does proceed, the amount collected will be relatively small.
Self-funded plans are mostly exempt from state regulations, and the federal agency in charge says there is only one inspector for every 8,800 health plans.
Some healthcare providers are facing significant pay cuts
Multiplan and insurance companies say they are fighting rampant overcharging by some doctors and hospitals. This chronic problem has been linked by studies to rising health care costs and is being investigated by regulators. However, low payments also put pressure on small medical practices.
Kelsey Toney, who provides behavioral therapy to autistic children in rural Virginia, had her pay cut in half for two of her patients. She doesn't charge the parents of these children, but she doesn't accept new patients with similar insurance, she said.
Other providers said they have started asking patients to pay upfront because asking for insurance increases is time-consuming, frustrating and wasteful.
Former MultiPlan employees said there was an incentive to fix unfairly low amounts. Their bonuses were tied to the reduction.
Employers are charged high fees
Insurers are touting MultiPlan as a way to keep costs down, but some employers are frustrated by unexpectedly large fees.
In the case of New England Motor Freight, a New Jersey trucking company, UnitedHealthcare used MultiPlan to reduce the hospital's bill from $152,594 to $7,879, then charged the company a $50,650 processing fee.
In the Phoenix area, trustees managing the electricians union health plan said the fees charged by Cigna rose from about $550,000 in 2016 to $2.6 million in 2019, according to a later lawsuit. He was surprised to learn that.
Employers seeking to verify the accuracy of insurance company claims may face the challenge of accessing their employees' data.
Private equity plays both roles.
For years, insurance companies have raised prices and blamed private equity-backed hospitals and physician groups for making health care more expensive. But MultiPlan is also backed by private equity.
MultiPlan's annual revenue rose to about $1 billion thanks to its adoption of a more aggressive cost-cutting approach. Its main product is an algorithm-driven tool called Data iSight, which consistently recommends doctors pay the lowest amount and typically has the highest processing fee.
MultiPlan went public in 2020, and its largest shareholders include private equity firm Hellman & Friedman and the Saudi government's sovereign wealth fund, according to regulatory documents.
