Sanders, Wyden press for information from MultiPlan on health services, costs

Sens. Bernie Sanders (I-Vt.) and Ron Wyden (D-Oreg.) are scrutinizing a data analytic firm over concerns the services it provides to insurance companies are leaving patients with “sky-high medical bills.”

The senators issued a letter last week to Travis Dalton, president and CEO of the healthcare data analytics firm MultiPlan, stating their concerns over reports his company’s negotiation process for out-of-network claims “dramatically reduces plan payments for out-of-network services and leaves patients with sky-high medical bills that they are on the hook for paying.”

In the letter, Sanders and Wyden cited a New York Times investigation last month that found that MultiPlan and the insurers it works with benefitted financially by recommending smaller reimbursements for services provided by out-of-network physicians.

“We are concerned that your company’s Data iSight product improperly drives up patient health care costs and, further, that the financial incentives built into the fee for the use of the Data iSight product result in an improper conflict of interest between determining a plan’s liability for out-of-network claims and the plan’s duty to provide promised benefits pursuant to [Employee Retirement Income Security Act],” they wrote.

The Employee Retirement Income Security Act (ERISA) of 1974 sets minimum standards for voluntarily established health plans within the private sector. Denying employees benefits from a qualifying plan or breaching fiduciary duties are considered violations of the ERISA.

They noted MultiPlan once negotiated directly with healthcare providers to determine what rate would be paid under a group health plan but its Data iSight product now operates as an “opaque process.”

“Because your company is paid more when it reaches lower payment amounts, the payments to health care providers are often far lower than the billed amount, with some describing these amounts as ‘crazy low,’” they added. “When the plan is only willing to pay this low amount, patients are on the hook for the remaining bill, which in extreme cases can total hundreds of thousands of dollars.”

Wyden and Sanders requested that MultiPlan brief the Senate committees on Finance and Health, Education, Labor and Pensions, which they respectively chair, on the allegations in the Times article.

They also asked to know if MultiPlan denies ERISA fiduciary status as part of the services it provides.

“MultiPlan plays a critical role in the healthcare system by helping lower out-of-pocket costs and reducing or eliminating medical bills for millions of patients,” MultiPlan said in a statement to The Hill. “We are working with the Committees to address their questions and explain the cost and complexity patients can face when obtaining out-of-network medical services, especially when many providers charge many times more than what they charge Medicare and commercial in-network patients for the same services.

Sen. Amy Klobuchar (D-Minn.) flagged the New York Times article to the Justice Department and the Federal Trade Commission last month, asking that they investigate the “use of algorithms that collect and process data in the out-of-network insurance payment industry.”

MultiPlan is currently facing several lawsuits by health systems in the U.S. who allege the company’s algorithm resulted in reimbursements rates far below what insurers would have paid otherwise. Community Health Systems, one of the largest hospital chains in the U.S., filed its own lawsuit earlier this month.

“MultiPlan has created, and continues to orchestrate, an ongoing cartel agreement with competing health insurance companies throughout the United States to bilk healthcare providers out of billions of dollars per year,” Community Health Systems wrote in its complaint.

— Updated at 2:49 p.m.