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Sen. Klobuchar Urges Regulators to Probe Collusion in Healthcare Pricing

By  |  May 1, 2024

Senator Amy Klobuchar has raised concerns over possible collusion in healthcare pricing, urging federal regulators to investigate the role of data analytics firm MultiPlan in facilitating alleged price fixing among major health insurers. This comes following a recent report by the New York Times shedding light on MultiPlan’s influence in the pricing of out-of-network medical claims.

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    In a letter addressed to the heads of the Justice Department’s antitrust division and the Federal Trade Commission, Senator Klobuchar emphasized the need to examine whether MultiPlan’s algorithms have enabled insurers to conspire in reducing payments to doctors, potentially leading to higher bills for patients. She argued that algorithms should enhance decision-making accuracy and efficiency, not enable collusion to the detriment of patients.

    MultiPlan, a significant player in the healthcare industry, provides pricing recommendations for out-of-network medical claims, often resulting in reduced payments to providers. According to reports, this practice allows MultiPlan and its partner insurers to increase their profits, albeit at the expense of patients who may face higher bills due to unpaid balances.

    Major insurers such as UnitedHealthcare, Cigna, and Aetna rely on MultiPlan’s pricing recommendations, with the firm boasting its integral role in clients’ claims-processing systems to investors. Critics argue that this arrangement could potentially amount to price fixing, as insurers may opt to follow MultiPlan’s low pricing recommendations rather than competing to offer better coverage.

    Experts in antitrust law, including Barak Orbach from the University of Arizona, have echoed concerns, suggesting that the situation warrants investigation by regulatory agencies. Orbach highlighted the apparent strength of the case against MultiPlan and its partners, emphasizing the need for thorough scrutiny.

    Source: NY Times