Congress Asks Regulators About ‘Troubling’ Health Insurance Tactics

Lawmakers on Tuesday called on health insurance regulators to detail their efforts against “troubling practices” that have raised costs for patients and employers.

In a letter to a top Labor Department official, two congressmen cited a New York Times investigation of MultiPlan, a data firm that works with insurance companies to recommend payments for medical care.

The firm and the insurers can collect higher fees when payments to medical providers are lower, but patients can be stuck with large bills, the investigation found. At the same time, employers can be charged high fees — in some cases paying insurers and MultiPlan more for processing a claim than the doctor gets for treating the patient.

The lawmakers, Representatives Bobby Scott of Virginia and Mark DeSaulnier of California, both Democrats in leadership positions on a House committee overseeing employer-based insurance, highlighted MultiPlan as an example of “opaque fee structures and alleged self-dealing” that drive up health care costs. In their letter, they pressed the department for details on its efforts to enforce rules meant to promote transparency and expose conflicts of interest.

MultiPlan’s business model focuses on the most common way Americans get health coverage: through an employer that “self-funds,” meaning it pays medical claims with its own money and uses an insurance company to process claims. Insurers such as Aetna, Cigna and UnitedHealthcare have pitched MultiPlan’s services as a way to save money when an employee sees a provider out of network.

In many cases, MultiPlan uses an algorithm-based tool to generate a recommended payment. Employers typically pay insurers and MultiPlan a percentage of what they call the “savings” — the difference