Senator Urges Investigation into Healthcare Pricing Algorithms

Senator Amy Klobuchar has initiated a significant step towards ensuring fair practices in the healthcare industry by requesting an investigation into the utilization of algorithm pricing tools by health insurers. In her letter to the Attorney General's office and the Federal Trade Commission , Klobuchar expressed her concerns about recent reports indicating that firms might be leveraging algorithmic tools to undermine competition and shift additional costs onto patients receiving out-of-network medical care.

The Senator specifically mentioned Claritev , a Massachusetts-based company specializing in claim-cost management, as an example. MultiPlan is reported to sell data to help insurance companies determine how much they should pay providers for out-of-network medical care and how much of that cost is passed on to patients. Klobuchar emphasized that, rather than competing for business by reducing costs to employees, insurance companies might be using algorithmic tools to process data gathered across numerous competitors, thus subverting competition among insurance companies.

Klobuchar highlighted that MultiPlan acts as a central hub for out-of-network payment data across the industry and uses algorithmic tools to process this data to recommend artificially low payments to physicians, potentially at the expense of employees or patients. Furthermore, the Senator pointed out that MultiPlan reportedly collects fees commensurate with how little its insurance-company clients pay to doctors, implying that the more money MultiPlan forces patients to pay for out-of-network care, the more money it makes.

Insurers have defended the use of MultiPlan's tools as a means to combat excessive billing by some providers, such as consolidated hospital systems and private equity-backed staffing firms, according to the 纽约时报 . Klobuchar noted that the Department of Justice and the Federal Trade Commission have previously argued that the use of algorithmic price-setting firms in the rental and hotel markets violates antitrust laws, suggesting that similar issues could be at play in the healthcare industry.

Klobuchar has urged the Department of Justice and the Federal Trade Commission to investigate the use of algorithms that collect and process data in the out-of-network insurance payment industry to determine payments for physicians and out-of-pocket costs for patients. She believes such an investigation is necessary to determine whether any of these practices violate the law.

This matter is of significant importance, as evidenced by a class action complaint brought against MultiPlan, Aetna, a CVS Health Company , Elevance Health , Centene Corporation , Cigna Healthcare , Health Care Service Corporation , UnitedHealth Group , Humana , and Kaiser Permanente in April. The complaint alleges that the nation's leading commercial healthcare insurance providers, through MultiPlan, have conspired to fix, suppress, and stabilize the reimbursement rates that they pay to healthcare providers for out-of-network healthcare services in the United States, in violation of Section 1 of the #ShermanAntitrustAct. The complaint further states that the defendants' knowing and purposeful use of shared repricing tools sold and promoted by MultiPlan has enabled and facilitated this anticompetitive scheme, causing plaintiffs to receive artificially suppressed reimbursements for out-of-network healthcare services they have provided from no later than July 1, 2017, to the present.

Senator Amy Klobuchar's investigations could lead to a more transparent, fair, and consumer-friendly pricing environment in the healthcare industry and potentially influence practices and regulations in other sectors as well.