Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Ill.: Attempt to raise unclean hands defense denied in MultiPlan out-of-network pricing suit, (Jun 25, 2026)

By Kenneth H. Ryesky, M.B.A., J.D.

Plaintiff healthcare providers alleged to have billed for services that were not actually provided and billed separately for services which, per negotiated contracts, should have been bundled together.

A federal district court judge in Chicago has issued a Case Management Order denying a motion by the third-party payor defendants to amend their answers to include an unclean hands defense. The court found that the alleged "dirty hands" billing acts on the part of the healthcare providers had no direct nexus to the alleged conspiracies. The antitrust consolidated litigation concerns healthcare provider claims that MultiPlan, Inc. (now called Claritev) and third-party payors of healthcare services conspired to suppress reimbursement rates for out-of-network services (In re Multiplan Health Insurance Provider Litigation, No. 1:24-cv-06795 (N.D. Ill. Jun. 24, 2026)).

Background. Patients who seek healthcare are very commonly members or subscribers to a healthcare insurance plan or similar arrangement that covers a portion if not all of the cost of the healthcare services rendered. These third-party payors often negotiate discounted prices of healthcare services with healthcare providers, and thereby create payor "networks" of healthcare providing entities with whom the payors have made payment arrangements. Such third-party payors (1) encourage their subscribers to use healthcare providers that are part of the third-party payors' respective networks; and/or (2) limit the amounts paid, if any, to out-of-network providers whose services are used by the subscribers.

Where the payment from the third-party payor would be less than what the healthcare provider would ordinarily charge, the provider has the alternatives of (1) being content to provide the healthcare to the patient for whatever amount the third-party payor might tender; (2) accept the third-party payor's payment and then bill the patient for the amount of the shortfall ("balance billing"); or (3) decline to provide out-of-network services the patient. In such an environment, the third-party payors compete with one another (1) to attract healthcare providers into their networks by offering higher reimbursement rates; and (2) to attract subscribers by charging lower subscription fees and/or offering the subscribers broader coverage. The competitive environment thus incentivizes the third-party payor to manage its operations more efficiently, and also to offer better reimbursements to the healthcare providers.

Several lawsuits by healthcare providers have alleged that certain third-party payors, who should be competing with one another for providers in their networks, have conspired to suppress reimbursement rates across the industry. These lawsuits have been consolidated for multidistrict litigation. The mechanics of that alleged conspiracy entail the use of an algorithm called Data iSight, developed by MultiPlan, Inc., n/k/a Claritev Corp. (MultiPlan). The Data iSight algorithm tends to arrive at lower rates than the theretofore "usual, customary, and reasonable" (UCR) industry standard rates derived through independent sources and used by the third-party payors in negotiating with the healthcare providers.

The third-party payors, including MultiPlan, moved to amend their answers in order to assert an unclean hands defense.

The unclean hands defense. The court denied the third-party payors' motion to assert the unclean hands defense. This defense is rooted in a common law doctrine that those who seek equitable remedies must themselves have acted legally, ethically, and in good faith. Dissolution of the conspiracy, an commonly-sought injunctive relief prayed for by the healthcare providers is a remedy in equity.

Here, the third-party payors allege that the healthcare providers have improperly billed the payors through various practices. The healthcare providers, according to the third-party payors, have unclean hands and therefore are not entitled to the injunctive relief they seek.

Common law defenses were limited in antitrust cases by the Supreme Court in 1968 [Perma Life Mufflers, Inc. v. International Parts Corp., 392 U.S. 134 (1968)], reasoning that private antitrust lawsuits serve a public purpose beyond the harm alleged to have been caused to the antitrust plaintiff, and are not to be impeded. Case precedent, including that of the Seventh Circuit to which the instant decision might be appealed, have conclusively construed Perma Life to apply to the unclean hands defense.

Moreover, the general presumption that legislation by Congress occurs against the common law backdrop does not apply in the face of Congressional intent to the contrary. The antitrust laws evince an intent by Congress to move beyond the common law.

Additionally, the alleged "dirty hands" billing acts on the part of the healthcare providers do not have a direct nexus to the alleged conspiracies on the part of the third-party payors. There being no such nexus, the unclean hands allegations cannot be used to avoid liability (but might become relevant in the calculation of damages).

State law claims. Although the individual state antitrust statutes are largely modelled after the Sherman Act and other federal antitrust laws, the court ruled that the state law claims were not sufficiently developed at that stage of litigation for the Court to determine that an unclean hands defense against any particular state claim is or is not appropriate, and deferred decision as to amendment of the third-party payors' answers regarding the state law claims.

The Case is No. 1:24-cv-06795.

Judge: Kennelly, M.

Attorneys: Darren P. Nicholson (Burns Charest LLP) for Allegiance Health Management, Inc. Brian David Clark (Lockridge Grindal Nauen P.L.L.P.) for Live Well Chiropractic PLLC. Sadik Harry Huseny (Latham & Watkins LLP) for Multiplan, Inc. Feyilana Lawoyin (Williams & Connolly LLP) for Aetna, Inc.

Companies: Allegiance Health Management, Inc.; Live Well Chiropractic PLLC; MultiPlan, Inc.; Aetna, Inc.

Cases: Antitrust IllinoisNews