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PHOENIX - The state has filed a massive lawsuit against the healthcare data company MultiPlan and eight major insurance companies, alleging they used a shared algorithm to slash payments to doctors and leave patients with the bill.
Arizona's attorney general is calling it old-fashioned price-fixing using new technology.
What we know:
Attorney General Kris Mayes said Monday, June 1, this alleged scheme could be costing Arizona patients and providers billions of dollars. With a lawsuit filed, she’s working on stopping the scheme and returning the money.
"This is not how our health care system is supposed to work," Mayes said. "This is not how insurance companies are supposed to operate. And this is not what Arizona families deserve."
Arizona Attorney General Kris Mayes
Mayes is suing the healthcare cost management company MultiPlan and eight of the nation’s largest health insurers, including Aetna, Cigna, and UnitedHealthcare. The state alleges these companies used a shared algorithm to illegally fix prices and slash payments to doctors and hospitals for out-of-network care.
"By using a shared algorithm to set payments, these companies harmed doctors and patients alike – driving up out-of-pocket costs and making it harder for Arizonans to get the care they needed," Mayes said.
Mayes says the collusion boosted corporate profits while leaving Arizona patients stuck with massive, unexpected bills.
Big picture view:
"What MultiPlan and these insurance companies have been doing has hurt my patients, and it has hurt my practice’s ability to keep caring for them," Chandler physician Dr. Andrew Carroll said. "As a doctor there’s nothing more frustrating and more heartbreaking than watching an insurance policy get in the way of my patient’s needs."
Dr. Jason Jameson with the Arizona Medical Association added that the impact stretches across the industry.
"Arizona is already facing a dire healthcare workforce shortage … And the insurance price-fixing schemes are driving physicians out of practice," Jameson said.
The lawsuit seeks to stop the price scheme, secure civil penalties, and even force the companies to pay back affected patients and healthcare providers.
"Old-fashioned price fixing using new technology, but it is against the law all the same," Mayes said.
What's next:
After hearing from Mayes, FOX 10 reached out to MultiPlan and the eight insurance companies listed in the lawsuit.
Aetna responded saying, "We deny the allegations and will defend ourselves vigorously." HCSC responded saying they do not comment on pending litigation.
MultiPlan released this statement: "We are aware of the complaint filed by the Arizona Attorney General against MultiPlan and strongly disagree with it. The allegations are without merit, and the company stands by its position that it complies with state and federal antitrust laws. It is not uncommon to see copycat complaints filed in matters such as these, and similar theories have previously been dismissed by courts, including in the Verity matter: VHS Liquidating Trust v. MultiPlan Corporation, et al., Superior Court of California, County of San Francisco, Case No. CGC-21-594966. Because this is active litigation, we will defend ourselves through the legal process and will not comment further on the specifics of the complaint at this time. We remain focused on working with clients and partners across the healthcare ecosystem to make healthcare more transparent, accessible, and affordable for consumers."