Arizona AG Mayes sues health care giants over alleged price-fixing

PHOENIX (AZFamily) — The Arizona attorney general’s office has filed a lawsuit against a health care company and several health insurers, accusing them of quietly building and operating a price-fixing scheme that led state residents to pay more for out-of-network care.

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Mayes announced Monday that her office is suing MultiPlan, a health care cost management company, and numerous health insurance companies. Those insurers include Aetna, Centene, Cigna, Elevance, Health Care Service Corp., Humana, Molina and United Healthcare.

The lawsuit alleges that for years, the named insurers relied on a shared algorithm to decide how much to pay for out-of-network care—a common algorithm that in part relied on sharing confidential claims payment information through MultiPlan.

The attorney general’s office is accusing the health insurance companies of using the same formula and data instead of setting payments independently, resulting in extremely low payouts across the industry that continue to decrease. The suit claims that decreasing payouts lead to more profits for the insurers and higher costs for patients and providers.

“MultiPlan and major insurance companies across Arizona allegedly conspired to keep payments to providers low in a scheme to pad their profit margins,” Mayes said in a news release. “By using a shared algorithm to set payments, these companies harmed doctors and patients alike — driving up patients’ risk of paying more out-of-pocket costs, depriving providers of fair payment and sometimes forcing them to accept payment below the costs incurred for treatment, and making it harder for Arizonans to get the care they needed. This case is another example of old-fashioned price-fixing using new technology, but it’s against the law all the same.”

The lawsuit alleges that the named insurance companies followed MultiPlan’s pricing recommendations in a coordinated effort to reduce prices and that its algorithm consistently produced low payments regardless of where the out-of-network care happened or who provided it. The attorney general’s office says the effort caused competition to effectively disappear, while keeping the entire industry paying low payments.

The suit also claims that doctors who challenged the low payments were faced with MultiPlan employees who used aggressive tactics to convince providers to accept the amounts. The efforts particularly impacted providers in rural areas and mental health clinics, the lawsuit says.

Mayes says the actions violate the Arizona Uniform State Antitrust Act and the Arizona Consumer Fraud Act. The lawsuit asks that the court issue a permanent injunction and that money be returned to patients, providers and others who were harmed.

The lawsuit also calls for MultiPlan and the health insurance companies to surrender any profits earned through the scheme and for civil penalties to be imposed.

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Health Care Service Corp. told Arizona’s Family it does not comment on pending litigation.

“We deny the allegations and will defend ourselves vigorously,” a CVS Health spokesman said in an email to Arizona’s Family.

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.

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