Insurance-tech firm MultiPlan makes $155M buy after blank-check deal
Both MultiPlan and Discovery help insurers and other health care payers analyze claims, seeking cost-savings and potential errors. MultiPlan also organizes health care provider networks to negotiate costs.
MultiPlan said it saved its clients $19 billion in 2019. The company collects a fee on those savings, contributing to revenues of just a little less than $1 billion in 2019, according to filings with the U.S. Securities and Exchange Commission.
In a statement announcing the deal, MultiPlan Chief Executive Mark Tabak said, “Waste in the U.S. health care system accounts for about a quarter of total health care spending and presents a tremendous opportunity to deliver affordability, fairness and efficiency to the industry.”
The company has been accused of helping insurers play hardball with doctors. In November a group representing emergency room physicians at upstate New York health systems sued UnitedHealth and MultiPlan, accusing the companies of conspiring to undercut out-of-network claims.
“Together, United and MultiPlan have formed an enterprise that furnishes a vehicle to deny proper payment for emergency medical services … provided to United’s insureds,” the lawsuit read.
UnitedHealth called the suit meritless in a comment to Fierce Healthcare. The insurer and MultiPlan have until Feb. 25 to respond to the claims in U.S. District Court in New York.
MultiPlan, founded in 1980, counts about 700 insurers, government entities and other health care payers as its clients. Discovery brings a smaller list of clients to the deal, roughly 70. But Discovery connects MultiPlan with new technological capabilities and to Medicare Advantage and Medicaid markets.
Flush with new investor dollars, the company’s plan is to expand to capture more of the health care payments business through a strategy it has dubbed “enhance, extend, expand.”
Through a spokesperson, MultiPlan declined to comment further on the deal.
MultiPlan in November acquired HST—a firm in Laguna Hills, Calif., that manages billing and payments—for $140 million.