Healthcare cost management company Zelis stands at the center of a major lawsuit involving doctors, dentists, and other healthcare providers across the country. The case accuses Zelis of working with large insurance companies to unfairly cut payments for out-of-network care. These practices allegedly drain providers financially and limit patient access to care.
If you’ve received low or delayed payments from Zelis or felt forced to accept unreasonable reimbursement rates, you might qualify to join the lawsuit or take other legal action. Our team wants to hear your story and explain your options. Call Paul LLP Trial Attorneys today at (816) 984-8100 for a free consultation to discuss how these practices have affected you and what you can do next.
What Is Zelis?
Zelis is a company that works between health insurers and healthcare providers. It calls itself a “healthcare financial experience” optimizer. Its stated goal is to help insurers lower what they pay for claims by using tools like “repricing” and “claims negotiation.” Zelis also processes payments from insurers to providers. That means it handles both how much gets paid and how the money moves.
Zelis is backed by private equity firms, and it has grown quickly by buying other companies in the same space. The company works with hundreds of insurers, including many of the largest ones in the US. Doctors and dentists don’t get to decide whether or not to work with Zelis. Instead, insurers choose to use the company’s services to cut what they pay out-of-network providers. Critics say this setup leaves providers stuck with unfair payment offers and few real choices.
How Middlemen Like Zelis Operate in Our Healthcare System
Companies like Zelis exist because insurance companies have gaps in their provider networks, which give middlemen the opportunity to step in. Instead of expanding and improving their networks, many insurers simply hire companies like Zelis to manage costs behind the scenes. That often means cutting payments to doctors who work outside the insurer’s network. These out-of-network doctors and dentists never agreed to accept lower prices, but companies like Zelis stepped in anyway to force lower payouts.
Patients usually have no idea this is happening. They just want care. But these middlemen can and do delay payments, lower reimbursements, and increase billing confusion. As a result, some providers are forced to stop seeing out-of-network patients entirely. Others struggle to stay in business. These middlemen don’t improve care—they mainly help insurers save money and increase profits.
Allegations Against Zelis
Recently, a group of healthcare providers sued Zelis and several large health insurers. In its lawsuit, the group claims Zelis and the insurers worked together to lower payments to providers. The providers also allege that this agreement violated antitrust laws. They claim that Zelis built pricing tools that insurers used to cut payments across the board.
The case also alleges that insurers shared confidential data with Zelis and that Zelis used this data to set lower prices. The providers argue that this practice hurts both patients and doctors by making it harder to get care outside of insurer networks. They also claim that this setup prevents normal competition and allows a few big companies to control prices.
The court overseeing this case has appointed Rick Paul of Paul LLP Trial Attorneys as interim co-lead counsel. Our firm aims to challenge Zelis’ pricing practices and push for changes that will protect doctors, dentists, and patients from unfair payment systems.
A Closer Look at the Alleged Conspiracy
The lawsuit says Zelis and several major insurers agreed to suppress payments for out-of-network care. According to the complaint, the defendants shared private pricing data and used it to fix the amounts doctors received. The claim says that Zelis created “repricing” software that used this private data to apply price limits across the market. This alleged conspiracy allowed insurers to avoid real negotiations and pay only what Zelis calculated.
The complaint also claims that Zelis earned more money by cutting payments as much as possible since insurers paid it a commission based on those reductions. So, instead of competing, the insurers allegedly handed pricing control over to Zelis. The plaintiffs argue that this conspiracy has made out-of-network care less affordable and harder to find, all while boosting insurer profits.
A Pattern of Abuse
Zelis is not the first company accused of working with insurers to lower out-of-network payments. In the past, insurers used a company called Ingenix to set below-market rates. That practice ended after lawsuits and a large settlement. However, insurers began to use other private tools soon after, including those offered by Zelis.
The lawsuit against Zelis says the company built on those old practices by using new data and technology to do the same thing—cut payments to doctors and dentists. Once again, Zelis allegedly enabled insurers to avoid paying full rates for care, even when no contracts existed. The complaint demonstrates how this shift hurt providers over time. It points out that these pricing tools keep changing names but serve the same goal: to save insurers money at providers’ and patients’ expense.
Zelis Profits From Suppressed Reimbursement Rates
Zelis earns money when it helps insurers pay less. The recent lawsuit explains that Zelis takes a cut of the “savings” it creates for healthcare insurance companies. That means the less a doctor gets paid, the more Zelis profits. This setup gives Zelis a strong incentive to lower reimbursement rates for providers as much as possible.
The company uses software to decide how much to pay providers, often without talking to them first. It then offers that amount as a take-it-or-leave-it deal. Providers rarely get a chance to negotiate. If a provider pushes back, the process often gets delayed or becomes more complicated. The system works well for insurers and Zelis, but it cuts out providers and deprives them of fair pay for their services.
How These Practices Harm Doctors, Dentists, and Patients
Doctors and dentists say these payment practices make it more difficult for them to do their jobs. They often lose money on out-of-network care, so some stop accepting patients who aren’t in-network. Those who still accept out-of-network patients frequently struggle to cover costs. Small clinics face the biggest challenges since they don’t have teams to fight payment cuts or deal with appeals.
Patients also suffer in this system. They often have fewer choices and longer wait times when they need care. In rural areas, some patients have no in-network providers nearby. That means they are forced to choose between paying more for care or going without it. These unfair systems don’t just hurt businesses—they hurt the people who need care and those trying to provide it.
The Sherman Act and What’s at Stake Legally
The lawsuit against Zelis cites the Sherman Act, a federal law that bans certain types of agreements between companies. This law says businesses can’t work together to control prices or limit competition. The Sherman Act matters because it protects markets from unfair control. When large companies join forces to set prices, smaller businesses and regular people lose.
The providers who brought the lawsuit say Zelis and insurers violated the Sherman Act. They accuse the companies of working together to lower out-of-network payments and block fair pricing. If the court agrees with the plaintiffs, it could force changes in how these companies operate. It might also lead to financial relief for providers. This case will test how far companies can go when they say they’re managing costs but really end up controlling prices for everyone else.
Why This Case Matters Beyond Zelis
This lawsuit focuses on Zelis, but it highlights a bigger problem in today’s healthcare system. Insurers and middlemen keep creating new ways to cut payments without improving care. When they lower out-of-network reimbursements across the board, they make it harder for patients to get treatment. They also leave doctors and dentists with fewer options.
If companies like Zelis can do this without limits, others will likely follow. That means even fewer providers will accept out-of-network patients, and more practices will shut down. The outcome of this case could shape how insurers and third-party companies act going forward. If the court steps in, it could protect patients, providers, and small practices from future harm.
Paul LLP Trial Attorneys Is Fighting Back
Paul LLP Trial Attorneys is playing a lead role in the case against Zelis. The court selected the firm to guide the class action because of its experience with large-scale lawsuits. Paul LLP Trial Attorneys has joined forces with Hartley LLP to take on the legal work for the group of providers. Together, we will speak for all plaintiffs in the case.
The team at Paul LLP Trial Attorneys has handled numerous other cases involving unfair business practices in healthcare and finance. In this case, we aim to stop the alleged price-fixing and change how companies handle out-of-network payments. We want to hold these businesses responsible and stop the system from getting worse. Paul LLP Trial Attorneys isn’t just seeking payment for those who have suffered direct harm. We also want to push for changes that protect more providers and patients in the future.
Contact Us to Join the Lawsuit or Learn More
If Zelis or your insurer has underpaid you for the care you provided to out-of-network patients, now is the time to speak up. These practices can hurt your business and your patients. The antitrust attorneys with Paul LLP Trial Attorneys are leading the fight and want to hear from providers like you.
Call us today at (816) 984-8100 or contact us online for your free consultation. We’ll assess your situation, answer your questions, and explain what we can do for you.
