Revenues Down and Stock Battered as Data Firm Faces Scrutiny

Already under investigation in Congress, a data analytics firm that has helped major health insurers make billions of dollars by reducing reimbursements for medical bills is facing growing scrutiny from Wall Street and in the courts.

The firm, MultiPlan, and the insurance companies it serves often collect larger fees when payments to medical providers are far lower than the amount billed. A recent investigation by The New York Times found the approach left some patients with unexpectedly high bills as they were asked to pick up what their plans did not cover.

MultiPlan has seen its stock price drop by more than 70 percent since April, when The Times published its investigation, and its general counsel and chief financial officer have left their jobs. It disclosed quarterly financial results this month that its chief executive called “disappointing and unacceptable,” and it warned of a future hit to revenues as well.

The chief executive, Travis Dalton, acknowledged during a call with analysts that “media scrutiny has been an ongoing challenge.” The firm attributed slumping revenues largely to changes by major clients, though it declined to provide more detail.

In a note to investors, the research firm CreditSights, which regularly follows the company, said it suspected some clients were responding to “increased scrutiny on MultiPlan’s business model” and had “gravitated away from using MultiPlan in light of The New York Times article.”

Insurers who manage so-called self-funded health plans for employers — the most common way Americans get health coverage — often turn to MultiPlan for payment recommendations when patients receive care outside their plan’s network. The Times investigation found that MultiPlan had encouraged some insurers to use its most aggressive pricing tools, leaving medical providers with slashed compensation and employers with high fees — in some instances higher than the medical care payment itself.