Published on Aug 15, 2022
Some consumers seeking health insurance claim they are sold plans that are marketed as “nationwide PPO network plans” that provide benefits similar to traditional, comprehensive health insurance plans.
However, in reality the plans provide meager benefits, cap coverage, and exclude pre-existing conditions. To make matters worse, the purported PPO network of doctors is not what consumers were led to believe. Instead of a vast network of doctors who will accept their plan, consumers frequently have a hard time finding a doctor that accepts—or even recognizes—their plan.
MultiPlan (MPLN) does not offer or sell insurance. Rather, the company contracts with and receives revenue from health plans for PPO network and claim repricing services. Consumers who purchased limited benefit plans, association plans, indemnity plans, and healthcare cost share plans frequently complain about the role of the MultiPlan PPO network, according to a Capitol Forum investigation.
Federal and state regulators have been warning consumers about misrepresentation scams and are cracking down on the web of entities that form the junk insurance ecosystem that includes independent PPO networks; claims payers; insurance carriers, agencies, and independent agents; marketers; and third-party administrators.
Last week, the FTC announced a $100 million settlement with Benefytt Technologies for lying to consumers “about their sham health insurance plans.” Benefytt sells association memberships and other healthcare-related products to consumers, often through a network of telemarketing companies and lead generators, according to the FTC’s press release.
Benefytt’s “agents have often told consumers that a particular plan is a ‘PPO’ [and] is widely accepted by doctors…however, they often discover that their doctor does not accept the plan, or that the available benefits and discounts are negligible,” according to the FTC’s complaint.
A few years ago, MultiPlan said it was negatively affected in late 2018 and 2019 from regulatory and legal compliance related to a subset of customers’ limited benefit plans, resulting in a $50 to $60 million hit, according to former MultiPlan CFO David Redmond’s comments during a 2020 Analyst Day presentation. One possible explanation is that in November of 2018, the FTC obtained a temporary restraining order against one of Benefytt’s historically largest distributers, Simple Health Plans, and its owner Steven Dorfman, along with other entities, according to the FTC’s recent press release.
The recent FTC settlement requires Benefytt to notify all current policyholders of the FTC’s complaint and allow them to cancel their enrollment unimpeded. To the extent that MultiPlan receives revenue from the plans that use the company’s network, the cancelation of policies could negatively impact MultiPlan. Various consumer complaints and policy documents reveal a Benefytt subsidiary, My Benefits Keeper, is a third-party administrator that collects payments and manages—and tries to obstruct—cancellations for limited benefit plans involving the MultiPlan PPO network.
Multiplan notes in its SEC filings that if the demand for its PPO Network services declines or does not increase, its business may be materially and adversely affected.
In an emailed statement that did not address The Capitol Forum’s questions about the nature of Multiplan’s relationship with Benefytt, how MultiPlan earns revenue from limited benefit plans, and what impact MultiPlan foresees related to the FTC action against Benefytt, MultiPlan provided the following comment: “MultiPlan enjoys a 40-year history as the arbitrator of fairness in the healthcare space. Our services result in increased affordability, efficiency, and fairness across the US healthcare system. MultiPlan’s contracts with payors require them to comply with all applicable state and federal laws. We respect the work and the ruling of the FTC and will continue to work on behalf of payors, providers, and patients to ensure cost savings and appropriate reimbursement for services.”
Benefytt did not respond to a request for comment.
Consumers mistakenly believe they have MultiPlan “insurance” because of how junk plans are sold. Transcripts of sales agents calls produced by the FTC in a pending lawsuit against Simple Health illustrate how consumers were misled to believe that junk plans were traditional, comprehensive PPO medical insurance. “This is a PPO, just like what Blue Cross offers their PPOs. You can choose your own doctors and hospitals and you don’t need a referral to see a specialist,” one agent said during a sales call. “Yes, it’s a PPO through MultiPlan,” explained another agent during a separate call.
Telemarketers promise a PPO plan that includes all physicians in the U.S., according to the expert witness declaration of Brian J. Miller in the Simple Health matter. Miller, who is a physician, former federal regulator and expert in insurance design wrote in his report, “after purchasing Simple Health’s plan, consumers actually receive an indemnity plan with no network or preferred network, as consumers receive a limited, defined benefit.”
Jeremy Rios told The Capitol Forum in an interview that he was sold a “PHCS universal MultiPlan PPO” plan in June after he submitted an online form that was likely on a lead generation site. The PHCS network is MultiPlan’s national primary branded network, according to the company’s filings.
“The sales agent,” Rios recounted, “told me, ‘Obamacare has a $5,000 deductible. We have $0 deductible. Every doctor accepts this. You get two doctor visits a year and only $50 copay for ER care.’” Rios said he was charged $305 to enroll and then $235 would be debited from his bank account monthly. Rios said he called multiple doctors’ offices but “no one knew who MultiPlan was.” He immediately tried to cancel the plan which he said required him to spend hours making numerous phone calls before he successfully cancelled the plan and was refunded the $305 enrollment fee.
Another consumer shared a welcome email and documents with The Capitol Forum that he received in October 2019 after an unsolicited telemarketer sold him a “MultiPlan PPO plan” that was instead an association membership and a package of confusing products.
Source: Association plan welcome email and benefits card indicating My Benefits Keeper for billing and cancellation and MultiPlan network participation and logo.
Consumers have made numerous posts online indicating they were looking into or were sold MultiPlan “insurance.” Reputable insurance agents have posted warnings and videos to educate consumers about scams. One agent warned in a video, “MultiPlan, not insurance! If somebody tells you they have a MultiPlan network or the PHCS network, these are not insurance products. So, watch out for that!”
Insurance sales agents earn high commissions for selling junk plans. The consumer-facing sales operation for junk plans consists of insurance agents, marketers, and lead generator companies that feed prospective customers to agents.
According to the FTC’s complaint, “Benefytt pays sales agents commissions amounting to as much as forty percent of the total amount paid by consumers. In some circumstances, Benefytt also advances operating capital to distributors, which is secured by future commissions. Benefytt also pays distributors bonuses for hitting performance and compliance targets that Defendants establish.”
Independent sales agents who “wanna get rich real fast” know “MultiPlan is the way,” according to an agent’s comment posted on Facebook 14 weeks ago. The agent did not respond to a request for comment.
MultiPlan is aware limited benefit plans are sold with deceptive sales pitches about the MultiPlan network. According to a consumer warning on MultiPlan’s website and the company’s responses to BBB complaints, MultiPlan is aware that its PPO networks are being used to give false legitimacy to junk plans. When consumers direct complaints to MultiPlan, the company’s agents disclaim involvement and respond with comments similar to the following:
The Biden administration and House Democrats are focused on medical debt, harm caused by limited benefit plans. The Capitol Forum previously reported about the secretive and extensive role MultiPlan plays in the health insurance industry and how the company’s repricing and network services increase the healthcare cost burden on consumers.
In April, the Biden administration announced a series of reforms to lessen the burden of medical debt and increase consumer protections for medical products. House Democrats wrote to HHS Secretary Xavier Becerra in April urging him to “take action to protect Americans from short-term, limited-benefit (STLD) plans that fail to offer comprehensive health care coverage, commonly known as “junk plans…Junk plans pose clear risks to consumers.”
As noted above, some brokers selling the junk plans use the MultiPlan networks as a tool to legitimize the product they are selling.
HHS is planning to start rulemaking on short-term limited duration insurance, according to the agency’s rulemaking agenda. Consumer groups representing people with chronic diseases are “concerned that STLD plans have disproportionally harmed patients with pre-existing conditions,” and are urging HHS to adopt a number of consumer protections that would limit the sale and improve disclosures of these products.
The Capitol Forum has also previously reported about potential antitrust risk associated with MultiPlan’s business.
Recently, Max Miller, former assistant attorney general at the Iowa Attorney General’s office and recently selected to be an attorney advisor to FTC Commissioner Alvaro Bedoya, raised antitrust concerns related to MultiPlan in a keynote speech he gave in his personal capacity at DePaul University’s 2022 Health Law Symposium.
“MultiPlan is sitting at the crossroads of a market with multiple payers who are supposed to be competing with one another, with the provider of services sitting as the counterparty. MultiPlan sells its services to the payers and then holds [an] immense amount of competitively sensitive data that impacts the competition between the payers. Because of this, I’ll simply question, and not conclude, but could MultiPlan be serving as part of a hub and spoke conspiracy, allowing for information exchanges and potentially wage-fixing?”
