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A little-known data firm helps health insurers make more when less of an out-of-network claim gets paid. Patients can be on the hook for the difference.
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By Chris Hamby
Chris Hamby reviewed more than 50,000 pages of documents and interviewed more than 100 people for this article. The New York Times also petitioned two federal courts for materials under seal.
Weeks after undergoing heart surgery, Gail Lawson found herself back in an operating room. Her incision wasn’t healing, and an infection was spreading.
At a hospital in Ridgewood, N.J., Dr. Sidney Rabinowitz performed a complex, hourslong procedure to repair tissue and close the wound. While recuperating, Ms. Lawson phoned the doctor’s office in a panic. He returned the call himself and squeezed her in for an appointment the next day.
“He was just so good with me, so patient, so kind,” she said.
But the doctor was not in her insurance plan’s network of providers, leaving his bill open to negotiation by her insurer. Once back on her feet, Ms. Lawson received a letter from the insurer, UnitedHealthcare, advising that Dr. Rabinowitz would be paid $5,449.27 — a small fraction of what he had billed the insurance company. That left Ms. Lawson with a bill of more than $100,000.
“I’m thinking to myself, ‘But this is why I had insurance,’” said Ms. Lawson, who is fighting UnitedHealthcare over the balance. “They take out, what, $300 or $400 a month? Well, why aren’t you people paying these bills?”
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How MultiPlan and Insurers Make Money on Fees
MultiPlan and health insurers typically receive a percentage of the “savings” on each claim, creating an incentive to recommend lower payments.
EXAMPLE 2:
EXAMPLE 1:
MULTIPLAN ADVISES A 20% PAYMENT
MULTIPLAN ADVISES A 50% PAYMENT
A lower payment
means bigger fees for
the insurer and MultiPlan, but also a bigger potential bill for the patient.
Doctor
bills
Employer
pays
Doctor
bills
$200
$1,000
$500
$1,000
DIFFERENCE
$800
The patient is potentially on the hook for this amount.
DIFFERENCE
$500
The patient is potentially on the hook for this amount.
$35
To MultiPlan
7%
FEES
$56
To MultiPlan
7%
Based on a
share of the
difference
(paid by insurer)
$175
To Insurer
35%
(paid by employer)
$280
To Insurer
35%
For a doctor’s bill of $1,000:
EXAMPLE 2:
EXAMPLE 1:
MULTIPLAN
ADVISES A
20% PAYMENT
MULTIPLAN
ADVISES A
50% PAYMENT
A lower payment means bigger fees for the insurer and MultiPlan, but also a bigger potentialbill for the patient.
Employer
pays
Employer
pays
$200
$500
DIFFERENCE
$800
The patient is potentially on the hook for this amount.
DIFFERENCE
$500
The patient is potentially on the hook for this amount.
Based on a share of the difference
FEES
$35
$56
To MultiPlan
7%
7%
(paid by insurer)
$175
$280
To Insurer
35%
35%
(paid by employer)
Fee percentages vary based on negotiated contracts.
By The New York Times
Confidential Pricing and Fee Data
Itemized payments and fees for thousands of claims were made public in a lawsuit against Cigna after The Times petitioned the court. The insurer and MultiPlan opposed the release, calling the data “highly confidential.”
Payment amount
For providing outpatient
substance abuse treatment,
the facility received $134.13.
Fee for Cigna
For processing the claim,
Cigna received $658.75,
nearly five times as much
as the treatment center.
Fee for MultiPlan
For recommending a payment
amount, MultiPlan received
$167.48, slightly more than
the treatment center.
Payment amount
For providing outpatient substance abuse
treatment, the facility received $134.13.
Fee for Cigna
For processing the claim, Cigna received
$658.75, nearly five times as much as the
treatment center.
Fee for MultiPlan
For recommending a payment amount,
MultiPlan received $167.48, slightly more
than the treatment center.
By The New York Times
Fact Check: An Explanation of Benefits
Insurance statements often identify savings or discounts. But sometimes patients can still be billed for that amount, as in this case involving the UnitedHealth subsidiary UMR.
Your discount: $871.78
Your plan negotiates discounts with providers and facilities to help save you money.
You saved: $1,293.74
82% of your service was covered by your
plan discounts, your employer-sponsored benefits plan, or other amounts for which you arenot responsible.
Your discount: $871.78
Your plan negotiates discounts with providers and facilities to help save you money.
You saved: $1,293.74
82% of your service was
covered by your plan discounts, your employer-sponsored
benefits plan, or other amounts for which you are not responsible.
By The New York Times
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