Sens. Bernie Sanders (I-Vt.) and Ron Wyden (D-Ore.) are scrutinizing a data analytics company over concerns that services it provides to insurance companies are leaving patients with “skyrocketing medical bills.” .
O senators issued a letter last week to Travis Dalton, president and CEO of healthcare data analytics company MultiPlan, expressing his concerns about reports that his company’s negotiation process for out-of-network claims “drastically reduces plan payments for out-of-network services and leaves patients with sky-high medical bills that they are about to pay.”
In the letter, Sanders and Wyden cited a New York Times investigation last month found that MultiPlan and the insurers it works with benefited financially by recommending lower reimbursements for services provided by out-of-network doctors.
“We are concerned that your company’s Data iSight product unduly increases patient health care costs and, further, that the financial incentives built into the fee for use of the Data iSight product result in an improper conflict of interest between determining liability of a plan for out-of-network claims and the plan’s duty to provide promised benefits in accordance with [Employee Retirement Income Security Act],” they wrote.
The Employee Retirement Income Security Act (ERISA) of 1974 establishes minimum standards for health plans voluntarily established in the private sector. Denying employees benefits from a qualified plan or violating fiduciary duties are considered violations of ERISA.
They noted that MultiPlan previously 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 receives more when it reaches lower payment amounts, payments to healthcare providers are often much lower than the billed amount, with some describing these amounts as ‘very low,'” they added. “When the plan is only willing to pay this low amount, patients are forced to pay the rest of the bill, which in extreme cases can total hundreds of thousands of dollars.”
Wyden and Sanders requested that MultiPlan inform the Senate Finance and Health, Education, Labor and Pensions committees, which they respectively chair, about the allegations in the Times article.
They also asked whether MultiPlan denies ERISA fiduciary status as part of the services it provides.
“MultiPlan plays a critical role in the healthcare system, helping to reduce 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 answer their questions and explain the cost and complexity that patients may face when obtaining out-of-network medical services, especially when many providers charge many times more than they charge Medicare and commercial in-network patients . the same services.
Sen. Amy Klobuchar (D-Minn.) flagged The New York Times article to the Department of Justice and the Federal Trade Commission last month, asking them to investigate the “use of algorithms that collect and process data in insurance outside of the payments sector network.”
MultiPlan is currently facing several lawsuits from healthcare systems in the US who allege that the company’s algorithm resulted in reimbursement rates far below what insurers would have otherwise paid. Community Health Systems, one of the largest hospital chains in the U.S., filed its own lawsuit earlier this month.
“MultiPlan created, and continues to orchestrate, an ongoing cartel agreement with competing health insurance companies throughout the United States to steal billions of dollars a year from health care providers,” Community Health Systems wrote in your complaint.
Updated at 2:49 p.m. EDT
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