Take into account rising healthcare costs

Navigating the healthcare system in the United States can often feel like getting lost in a maze. What kind of doctor should I see? Who takes my insurance? What is a co-payment anyway?

For this reason, Chris Hamby, an investigative journalist, has dedicated much of his five-year career at the New York Times to guiding readers through such dizzying questions. His latest article, published online this month, explores the complex topic of insurance bills.

Last year, Hamby began investigating MultiPlan, a data company that partners with several major health insurance companies, including UnitedHealthcare, Cigna and Aetna. After a patient goes to an out-of-network medical provider, the insurer often uses MultiPlan to recommend the amount to reimburse the provider.

Mr Hamby's investigation revealed that MultiPlan and insurers are incentivized to reduce payments to providers; by doing so, they obtain higher compensation, which is paid by the patient's employer. Many patients are forced to pay the rest of the bill. (MultiPlan said in a statement to the Times that it uses “well-recognized and widely accepted solutions” to promote “affordability, efficiency and equity” by recommending a “reimbursement that is fair and that providers are willing to accept in lieu of plan billing members for the balance.”)

In an interview, Mr. Hamby shared his experience analyzing more than 50,000 pages of documents and interviewing more than 100 people. This conversation has been edited.

Where did your investigation begin?

Last year we looked at health insurance issues generally. MultiPlan kept coming up in my conversations with physician groups, clinicians, and patients. It was initially unclear what exactly MultiPlan did. There were some lawsuits surrounding its partnership with UnitedHealthcare, but it was difficult to understand the company's role in the industry. We eventually accumulated more information about MultiPlan's relationships with large insurance companies.

What did the doctors and other operators say?

Mainly because they had seen their reimbursements drastically reduced in recent years and that it was becoming difficult for them to sustain their practices. They said they had previously been more successful in negotiating and obtaining higher payments.

Among your findings, perhaps the most surprising is that MultiPlan receives a portion of the money saved by employers.

Yes, but I wouldn't call it a cut. It's very complicated. MultiPlan charges a fee based on the savings achieved for employers. But in some cases, the savings are passed on to the patient in the form of a bill. Both insurers and MultiPlan have financial incentives to keep payments low because in many cases they receive more money.

But it wasn't always like this, right?

Right. MultiPlan was founded in 1980 and was a fairly traditional out-of-network cost containment company. Doctors and hospitals agreed to modest discounts with MultiPlan and agreed not to try to collect more money from patients. It was a balancing act.

But this balancing act has changed over time. The founder of MultiPlan sold the company to the Carlyle Group, a large private equity firm, in 2006. He moved away from trading and towards automated pricing. They purchased one company in 2010 and another key company in 2011, and in doing so, acquired these algorithm-based tools that became the backbone of MultiPlan's business.

You have read more than 50,000 pages of documents for your investigation. How do you begin to sift through so much information?

I love a good collection of documents. There were no major losses. It was more about piecing together information from many different sources: legal documents, documents that providers and patients shared with me, their communications with MultiPlan and insurers. We asked federal judges to unseal some documents that had previously been classified, including emails between Cigna executives, documents describing how some MultiPlan tools work, and data on thousands of medical claims.

What has been the biggest challenge in your reporting?

Find patients and caregivers who are willing to talk publicly about their experiences, because this is a really sensitive topic. Many insurers feared that if they spoke out, insurance companies might retaliate. For many of the patients I spoke with, it also meant making their personal medical history available to the public.

What caught your interest as a healthcare and pharmaceutical industry reporter?

For many Americans, healthcare is an almost universally frustrating and confusing experience. It is a phenomenon that has direct effects on people's health, their wallet, or both. I really enjoy learning about things that affect people's health. I try to make this information accessible to millions of people who are affected by it but who may not have much time to understand it.

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