MultiPlan Stock

MultiPlan Corporation provides data analytics and technology-enabled solutions designed to bring affordability, efficiency, and fairness to the U.S. healthcare industry.

The company has evolved both organically and through acquisition into a national organization offering three categories of services:

Analytics-Based Services: Data-driven algorithms, which detect claims over-charges and either negotiate or recommend fair reimbursement using a variety of data sources and pricing algorithms.

Network-Based Services: Contracted discounts with healthcare providers to form one of the largest independent preferred provider organizations (PPOs) in the United States with over 1.2 million healthcare providers under contract, as well as outsourced network development and/or management services.

Payment and Revenue Integrity Services: Data, technology, and clinical expertise deployed to identify and remove improper and unnecessary charges before or after claims are paid, or to identify and help restore and preserve underpaid premium dollars.

Although the end beneficiary of the company’s services are employers and other plan sponsors and their health plan members, its direct customers are typically health plan administrators (Payors). The company offers these Payors a single electronic gateway to a comprehensive set of services in each of the above three categories, which are used in combination or individually to reduce the medical cost burden on their health plan customers and members while fostering independently developed fair and efficient payments to the providers. These comprehensive offerings have enabled the company to maintain long-term relationships with a number of its customers, including relationships of over 25 years with some of the nation's largest Payors.

Solutions

Analytics-Based Services

The company’s Analytics-Based Services reduce the per-unit cost of claims using data-driven negotiation and/or reference-based pricing methodologies. These services generally are used in a solution hierarchy after network services to reduce claims with no available network contract, but also are used standalone. All of the services in this category leverage the company’s information technology platform, public data sources, and the billions of claims that it has reviewed and are included in its database reflecting both network and out-of-network priced claims, as well as the results of clinical coding analyses. They feature proprietary algorithms and machine learning/AI to allow claims to be processed quickly and accurately.

Reference-Based Pricing (RBP): RBP provides Payors with a recommended payment amount for claims based on a reference point. Most RBP programs in the market uses Medicare as the reference point. The company also offers this option, but most customers elect to use its Data iSight program, which uses facility cost as the facility reference and median reimbursed amounts as the professional reference. Both methodologies use data from readily-available public and private sources, which feed its proprietary automated algorithms to deliver defensible, consistent pricing. RBP recommendations do not incorporate member protection from balance billing, so the service includes optional post-payment negotiation and patient advocacy services to negotiate settlements where needed to eliminate balance billing. The company offers a number of additional choices of reference point, including median contracted rates (adjusted to the Qualifying Payment Amount for certain surprise bill claims), and usual and customary charges. The company’s Reference-Based Pricing services are used by all types of Payors, most notably large commercial insurers, Blue Cross and Blue Shield plans, provider-sponsored and independent health plans. They are most commonly priced at a percentage of savings identified.

Value-Driven Health Plan Services (VDHP): VDHP is a form of reference-based pricing that bundles member and provider engagement tools to enable employers and other health plan sponsors to offer low-cost health plans. The engagement tools include member shopping based on quality, cost and provider acceptance of the reimbursement; provider education and, where applicable, negotiation in advance or after payment; point-of-service cash payment processing; and other features designed to ensure satisfaction of both members and providers while delivering significant cost reduction. These tools distinguish VDHPs from other plans using RBP because they deliver many of the benefits that plan members and providers expect with a PPO network, and therefore make it feasible to replace the network either in part or in full. The company’s VDHP service offerings enable a range of VDHP configurations, including a standard form of VDHP, which integrates its PPO network for professional and select facility services; a full VDHP, which has no network; and a community-based VDHP, which features an agreement with a marquee health system in the area to accept the reference-based price in exchange for preferred steerage of the health plan’s members. VDHP services are sold to employers directly using the broker/consultant channel, or through Third-Party Administrators (TPAs).

Financial Negotiation: The company’s financial negotiation services assist Payors with pricing claims from providers with whom neither they nor it have been able to secure a contractual discount. The company handles these claims on an individual basis and attempt to negotiate with the provider an acceptable payment amount for a specific claim that includes member protections from balance billing. Negotiation agreements protect the health plan member from balance billing. Approximately half of the successfully negotiated claims are completed in a fully automated manner. These claims include those in which the proposed negotiated amount is generated by algorithms and automatically transmitted to the provider’s office, and/or that are electronically accepted and signed by the provider. Certain providers also choose to set up an arrangement with the company for pre-determined levels of discount to be automatically deducted on claims that would otherwise be individually negotiated.

Surprise Billing Services. Introduced in 2021, the company’s surprise billing services enable Payors to comply, or to help their employer/plan sponsor customers to comply, with the federal No Surprises Act (NSA), which became effective on January 1, 2022. The NSA, and interim final regulations issued on July 13, 2021, and October 7, 2021 (IFRs) that implemented the NSA, introduces changes to the reimbursement process of certain types of medical claims, increasing what was typically a one to two step reimbursement process to five steps. The company performs all five steps in an end-to-end service, or makes each step available as components to meet the specific needs of each Payor. The company leverages existing technology and expertise in data science, claim pricing and negotiation in offering these new services. They are used by all types of Payors that must comply with the NSA; and are priced either at a percentage of savings for the end-to-end service, or on a per-claim basis for individual components.

Network-Based Services

The company’s Network-Based Services reduce the per-unit cost of claims through contracts with over 1.2 million healthcare providers and facilities that establish discounts with member protection from balance billing in exchange for patient steerage and other provider-friendly terms and conditions. These services generally are used first in a solution hierarchy with members actively steered to participating providers through online and other directories. The services leverage the company’s extensive network development, credentialing and data management capabilities, as well as a sophisticated transaction engine that matches rendering provider information on the claim to the correct network contract so the discount can be applied. The company offers a variety of network configurations to support all types and sizes of health plans, generally used as either the primary network, or as a complement to another primary network.

Primary Networks: For Payors without their own direct contractual discount arrangements with providers, the company’s primary networks serve as the network for the Payor’s commercial or government health plans in a given service area in exchange for a per-employee-per-month (PEPM) rate, or as the Payor’s out-of-area extended primary network in exchange for a percentage of the savings identified. The company’s national primary network, branded (Private Healthcare Systems, Inc.) PHCS Network is accredited for credentialing by the National Committee for Quality Assurance. This provides assurances to employers/plan sponsors and plan members of the quality of providers in the network. The company also offers custom development of primary networks, leveraging its extensive network development team and analytic tools, including a tool combining internal provider data with public sources to enable strategic targeting of providers to be contracted. Customers of this custom build service include Medicare Advantage and Medicaid health plans seeking assistance with expansion plans or help maintaining the required network adequacy.

Complementary Networks: The company’s complementary networks provide Payor customers with access to its national network of healthcare providers that offer discounts under the health plan’s out-of-network benefits, or otherwise can be accessed secondary to another network. Payors use the network to expand provider choice for consumers, and to achieve contracted reductions with member protections on more claims. The service is priced based on a percentage of savings identified. Customers most commonly include large commercial insurers, property and casualty carriers via their bill review vendors, Taft-Hartley plans, provider-sponsored and independent health plans, and some TPAs.

Payment and Revenue Integrity Services

The company’s Payment and Revenue Integrity Services improve the accuracy of payments made to providers, leading to a reduction in overall medical cost by minimizing overpayments. They use data, technology and clinical expertise to assist Payors in identifying improper, unnecessary and excessive charges before or after claims are paid, as well as issues with premiums paid by Centers for Medicare and Medicaid Services (CMS) for government health plans caused by discrepancies with enrollment-related data. Payment integrity services can be used before payment, to correct overpayments before they are issued, or after payment to enable the recovery of overpaid dollars. Revenue integrity services identify and correct errors in plan enrollment data that lead to underpayment of CMS premium dollars. The services rely heavily on the company’s internal and other data sources, advanced analysis, machine learning and transaction processing technology, as well as clinical expertise to aid in the identification and selection of issues to be addressed with the least provider abrasion.

Pre-Payment Clinical Reviews: Pre-payment claims are taken through payment integrity analytics, which may include any of the following additional reviews: medical coder, clinician, medical record or itemized bill. Claims are returned with recommended corrections or routed to a negotiator to leverage the billing issues to reach agreement with member protections for a lower reimbursement. The negotiation service targets non-contracted claims; the correction service targets all claims, including a Payor’s in-network claims. These services are most commonly used by large commercial and Medicare Advantage/Medicaid insurers, Blue Cross and Blue Shield plans, and provider-sponsored and other independent health plans. The services also are integrated into the company’s network pricing and analytics-based services so the majority of customers benefit from its pre-payment integrity services.

Coordination of Benefits and Subrogation Services (pre- and post-payment): Coordination of Benefits identifies payments that should have been made by a health plan member's other health insurance coverage (for example, if the member's spouse has coverage through another employer-sponsored plan). Subrogation Services identify payments made related to an accident that are the responsibility of another responsible third party. The services use data, technology and highly experienced staff to identify cases, validate coverage status, report or recover dollars paid in error, and assist with root cause correction to avoid future potential overpayments. Subrogation services are also available in a Software-as-a-Service (SaaS) model. These services are used by commercial, Medicare Advantage and Managed Medicaid Payors and depending on the service are priced based on a percentage of savings identified and/or recovered, per member per year, or per member with primary coverage identified.

Data Mining and Clinical Audits (post-payment): Data Mining deploys payment integrity analytics combining industry-accepted rules and plan-specific policies to identify overpayments associated with claim adjudication errors, billing errors and contract language, as well as their root causes. Findings are returned to the Payor for action. Clinical Audits utilize clinical subject matter experts to review medical records related to a claim to ensure that the claim was billed and coded appropriately. Clinical audits include Diagnosis Related Group validation, medical necessity short stay review, itemized bill review, and hospital bill audit. These services are used by commercial, Medicare Advantage, Managed Medicaid and state Medicaid Payors and are priced based on a percentage of savings identified and/or recovered.

Revenue Integrity Services: Targeting issues unique to Medicare Advantage Payors, these services use data, technology, and clinical expertise to identify and restore underpaid premiums, and to improve accuracy of future premiums paid to Medicare Advantage plans by CMS. There are three services offered, typically used in combination: Medicare Secondary Payor interfaces with CMS to confirm member eligibility records for primacy, correct inaccuracies, and help restore and preserve underpaid premium dollars; End Stage Renal Disease (ESRD) analyzes claim data to identify Medicare Advantage plan members with missing ESRD statuses at CMS and works with dialysis providers and CMS to correct the statuses; and Part D Other Health Insurance (OHI) leverages analytics to identify Medicare Advantage plan members where the Part D Pharmacy Coverage on file with CMS is inaccurate and effectuates corrections with CMS.

Growth Strategy

The company’s growth strategy leverages its longstanding relationships with Payors and extensive proprietary data and algorithms to not only accelerate its shift to in-network claims, but also to develop a beachhead for expanding its value to other Payor functions that service their plan members and the providers that service those members. The strategy has three components being executed simultaneously, such as enhance, extend and expand.

The first part of the company’s strategy is enhancing its platform. The company does this by improving and innovating upon its existing products to deliver more value on the claim volume it already receives from existing customers. The company has and continues to make investments in combining proprietary data with third party data, and in advanced technologies, such as artificial intelligence and machine learning to improve service performance. The company also has invested in sales resources to heighten cross-selling activity with existing customers.

The second element of the strategy is extending the company’s platform. The company does this by deepening penetration in customer segments it considers to be large markets where it either develops or acquires capabilities to address an unmet client need. The company’s initial target segments are a Payor’s in-network claims, government programs, such as Medicare Advantage and Managed Medicaid, TPAs and the Property and Casualty sector. The company leverages sales and product development initiatives, both organic and through acquisition, to execute on this part of the strategy. The company’s acquisitions of HSTechnology Solutions, Inc. (HST) in 2020 and LaunchPoint Ventures, LLC, doing business as Discovery Health Partners, in 2021 are two examples of the company’s work on this strategy, both adding new services with HST focused on TPAs and their employer customers and Discovery significantly increasing its footprint with in-network claims for commercial plans, as well as Medicare Advantage and Medicaid plans.

The third element of the strategy is to expand the company’s platform to new business models that deliver value-added, primarily Payor-centric services for providers and healthcare consumers. The company’s data, algorithms and service components can be leveraged by it, its Payor customers, and partner software companies to tackle some of providers' and consumers' biggest pain points, such as transparency of patient medical bills and consumer financing of medical expenses.

Markets

The company works with healthcare payors in the commercial healthcare, government healthcare and property and casualty markets. Substantially all of the company’s services are available in all 50 the U.S. states and the District of Columbia. All services are available to all applicable customers regardless of geographic location, company type or size.

Customers

The company works directly with Payors to manage medical cost and billing and payment accuracy for their own fully-insured health plans; and for their Administrative Services Only (ASO) and self-insured employers/plan sponsors. The company estimates that in 2021 its Payor customers served over 100,000 employers/plan sponsors actively using its services through the ASO channel, which generated over 85% of its combined Network and Analytics revenues in 2021. Within the ASO channel, the top 10 plan sponsors represent less than 20% of the company’s combined Analytics and Network revenues in 2021. The company also indirectly services consumers accessing healthcare services through commercial and government health plans or property and casualty policies. An estimated 60 million consumers have access to the company’s services through their health plans. In aggregate, it serves a diverse customer base comprised of national and regional insurance companies, Blue Cross and Blue Shield plans, provider-sponsored and independent health plans, TPAs, self-insured health plans, Property and Casualty bill review companies and other companies involved in the claim adjudication process.

The company’s three largest customers accounted for approximately 34%, 19% and 10%, respectively, of its revenues for the year ended December 31, 2021. Contract terms with larger customers are often three and as many as five years, while mid- to small-sized customer contracts are often annual and typically include automatic one-year renewals. However, the company continues to experience high renewal rates and its top ten customers based on full year 2021 revenues has been customers for an average of 25 years.

Network

As of December 31, 2021, the company’s network included over 1.2 million healthcare providers. The company’s team of approximately 100 network development professionals manages these network relationships across its Primary and Complementary PPO Networks.

Sales and Marketing

The company’s largest customers are serviced by a team of national account managers and senior executives responsible for continued growth of the relationship. The account team partners strategically with the company’s customers, leveraging its Healthcare Economics unit to mine the customer's data and proactively present opportunities to the customer to improve performance and competitive position. This team also delivers account service, including daily claims management, request for proposals (RFPs), service inquiries and other marketing and operational support functions. The national account managers are compensated with a base salary plus bonus linked to customer retention.

The majority of the company’s customers are serviced by a dedicated team of account managers and account service professionals organized into three market-focused departments—Health Plans (commercial and government), TPA/Employer, and Property and Casualty. These teams also include sales professionals responsible for new customer acquisition.

Competition

The company’s competitors vary by service as follows.

Analytics-Based Services: The company competes with 6Degrees; Advanced Medical Pricing Solutions (AMPS); ELAP Services; Payer Compass; Zelis; ClearHealth Strategies; and Naviguard.

Network-Based Services: The company competes with First Health Group Corp., an indirect wholly owned subsidiary of Aetna, Inc.;, TRPN; and Zelis.

Payment and Revenue Integrity Services: The company competes with Change Healthcare Inc.; Conduent; Cotiviti, Inc.; Optum; SCIO; and The Rawlings Group.

Government Regulations

The company is subject, either directly or indirectly through its customer relationships, to federal and state laws and regulations governing privacy, security and breaches of patient information and the conduct of certain electronic health care transactions, including for example, HIPAA, which imposes rules protecting individually identifiable health information and setting national standards for the security of electronic Protected Health Information; (PHI). The company is a Business Associate (as defined by HIPAA) of its customers. As such, the company must comply with all applicable provisions of HIPAA, including the HIPAA Security Rule and applicable provisions of the HIPAA Privacy Rule and the Breach Notification Rule.

History

MultiPlan Corporation was founded in 1980.