MultiPlan Corp

Our Business and Market Opportunity

MultiPlan is a market leading provider of data analytics and technology-enabled solutions designed to bring affordability, efficiency and fairness to the U.S. healthcare industry. Through our proprietary data and technology platform, we provide out-of-network cost management, payment and revenue integrity, data and decision science, business-to-business ("B2B") healthcare payments and other services to the Payors of healthcare, which are primarily health insurers and their administrative-services-only ("ASO") platforms, self-insured employers, federal and state government-sponsored health plans and other health plan sponsors (typically through their health plan administrators), and, indirectly, the plan members who are the consumers of healthcare services.

We exist to address the growing cost, risk, and complexity of healthcare in the U.S. According to Centers for Medicare and Medicaid ("CMS"), Americans are projected to have spent $4.5 trillion, or 17% of U.S. GDP, on healthcare in 2022, equating to approximately $13,493 per person. Healthcare spending is projected to grow by an average rate of 5.5% annually between 2022 and 2031, outpacing the average growth rate of 4.6% percent projected for GDP. CMS estimates that, at this rate, healthcare spending will represent $7.2 trillion by 2031. The Census Bureau reports that about 304 million people in the U.S. had health insurance coverage in 2022, of which 179 million were covered under employer-sponsored plans. CMS also cites that nearly 31 million people were enrolled in Medicare Advantage ("MA") plans in 2023, and another estimated 57 million were enrolled in managed Medicaid plans based on 2020 CMS figures.

As healthcare expenditures continue to rise, we believe services aimed at cost management, utilization management and billing and payment accuracy will continue to be highly important to Payors and consumers of healthcare services across the markets and customers we serve. We expect growth in demand for these services will be driven by three major trends: (i) increasing treatment and claims volumes from an aging population, the growth of the insured population in the U.S., and the advent of new treatments, modalities and technologies; (ii) increasing per unit costs related to medical inflation, driven in part by those same treatment, modalities, and technology enhancements; and, (iii) continued complexities of healthcare, including the prevalence of unintended billing complications and increased administrative burden of complying with new healthcare industry regulations.

As a market leading provider of data analytics and technology-enabled solutions that address these trends, we see meaningful opportunity to generate value for our customers and associated revenues for the Company. An estimated $1.2 trillion, or as much as 30% of U.S. healthcare expenditures, are attributed to some form of waste or abuse that leads to overcharges. MultiPlan’s services directly address the overcharges that account for about $400 billion of waste/abuse, including – excessive prices, clinical billing errors, suspect billing schemes and patterns, errors in enrollment data and, in some cases, services provided unnecessarily. Of the $400 billion in estimated waste/abuse, we estimate the total addressable market ("TAM") for our out-of-network cost management and out-of-network payment integrity solutions is approximately $6 to 8 billion. We estimate the TAM for our in-network payment and revenue integrity solutions is approximately $4 to 5 billion. Additionally, as a result of our recent corporate and product development activities, MultiPlan has entered new markets that significantly expand its addressable markets. Among others, we see opportunities to provide payor risk analytics, representing an estimated total addressable market TAM of $6 billion; healthcare B2B payments, representing an estimated TAM of $10 billion; and network transparency and analytic services, representing an estimated TAM of $1 to 2 billion.

MultiPlan was founded in 1980 as a New York-based hospital network and over time leveraged its position to pursue a consolidation strategy that established the Company as a leading independent national preferred provider organization ("PPO"). During that time, the Company invested significant capital in our data and technology assets to become a leading independent provider of out-of-network cost management and in- and out-of-network billing and payment accuracy services. These investments, which include over $600 million in capitalized software development cumulatively, have created a data and technology platform that is deeply integrated with many of our customers' information technology environments in a highly customized manner and that occupies a unique position in our customers' workflow by accessing and processing claims prior to payment of those claims to providers ("pre-payment"). This platform has enabled the Company to pursue a strategy of developing or acquiring new product and service offerings and swiftly and efficiently bringing them to scale. Consistent with this strategy, in 2023, the Company expanded the capabilities of its platform into data and decision science services through the acquisition of Benefits Science LLC ("BST"), a next generation, healthcare-focused data and advanced analytics company that applies descriptive, predictive, and prescriptive analytic solutions to client data and claims flows to help customers optimize decision-making, plan performance, network configuration, and competitive positioning.

MultiPlan’s platform sits at the nexus of four principal stakeholders in the healthcare industry – Payors, employers/plan sponsors, plan members and healthcare providers. We operate within an ecosystem that consists of over 700+ customers, more than 100,000 employers and other plan sponsors that actively use our services through these Payors, and we estimate that over 60 million consumers have access to our services through these plan sponsors, and approximately 1.4 million contracted providers within our propriety provider network. Our platform is uniquely positioned as a provider of independent solutions that reduce healthcare costs in a manner that is systematic, efficient, and fair to all these stakeholders.

Although the end beneficiaries of our services are employers and other plan sponsors and their health plan members, our direct customers are typically Payors, including ASOs and third-party administrators ("TPAs"), who distribute our services to those end customers. Our platform offers these Payors a single interface to our services, which are used in combination or individually to reduce the medical cost burden on their health plan customers, by managing the utilization of medical services, lowering the per-unit cost of medical services incurred, and producing fair and efficient reimbursements.

MultiPlan offers solutions to our customers across four service categories from our platform:

•Analytics-Based Services: a suite of data-driven algorithms and insights that detect claims over-charges and either negotiate or recommend fair reimbursement for out-of-network medical costs using a variety of data sources and pricing algorithms. These services are applied prior to the payment of the claim and are often processed within a day of receipt. Also included in this category is our Value-Driven-Health Plan services, which bundles reference-based pricing and member and provider engagement tools, enabling employers and other health plan sponsors to offer low-cost health plans;

•Network-Based Services: contracted discounts with healthcare providers to form one of the largest independent preferred provider organizations ("PPO") in the United States, as well as outsourced network development and/or management services. These services are applied prior to the payment of the claim and are typically processed within a day of receipt;

•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; and

•Data and Decision Science Services: a suite of solutions that apply modern methods of data science to produce descriptive, predictive and prescriptive analytics that drive optimized benefit plan design, support decision-making, improve clinical outcomes, and reduce the total cost of care. We formed this new service category in 2023 and accelerated its development through the acquisition of BST.

Additionally, in 2023 MultiPlan entered into a joint marketing and services agreement with ECHO Health, Inc. ("ECHO") that adds payment processing of healthcare provider claims as well as payments made to other service providers. We believe our B2B payments offering has the potential to enhance the value we provide across each of our primary service categories.

The breadth of our service offerings allows our customers the flexibility to tailor solutions for a wide range of plan sponsors with varying plan sizes and benefit needs. At the same time, our service offerings are delivered from our common platform and are often bundled together to provide a comprehensive cost management solution for each individual customer. As such, we manage our service offerings as integrated components of a holistic value proposition, rather than as distinct service lines.

Our Competitive Advantages

In support of our mission to drive fairness, efficiency and affordability for U.S. healthcare, MultiPlan has historically focused on helping Payors manage medical spend by lowering per-unit claim costs and improving billing and payment accuracy. The evolutionary path we have taken and the significant investments we have made to realize this ambition have provided MultiPlan with distinctive assets that allow us to more holistically help stakeholders in the healthcare system address the growing cost, risk and complexity of healthcare across both commercial and government markets. Above all, these distinctive assets include strong relationships with our customers and a proprietary data and technology platform. These assets are comprised of difficult to replicate resources that have competitively differentiated attributes:

•Leading position with healthcare payors and a large, established distribution channel– Over many decades, we have cultivated relationships with over 700+ Payors. Our relationships with many of our larger customers span decades and are characterized by strategic collaboration to advance these customers’ performance objectives and competitive positioning. This collaboration produces knowledge about our customers’ most pressing challenges and opportunities, which in turn informs our product development priorities and facilitates cross-selling that enables us to more quickly scale revenues from new products and generate returns on our product investments. The services we provide are often governed by contracts with multi-year terms in the case of our larger customers, or one-year terms with automatic renewals in the case of most of our smaller customers. As a result, our revenues are typically recurring, allowing us to engage and invest in longer-term strategic, operational, and financial relationships that benefits both our customers and the Company.

•Our platform is deeply integrated with our customers’ IT environments – Developed over time from our industry-leading provider network and over $600 million of cumulative capitalized software development, our platform is deeply integrated with many of our customers' information technology environments in a highly customized manner and occupies a differentiated position in our customers' workflow by accessing and processing claims prior to payment of those claims to providers ("pre-payment"). Within this context, we maintain approximately 400,000 custom business rules across approximately 330 applications to support our customers’ diverse workflows.

•Deep domain expertise, and significant claims and proprietary data – Over the course of 40 years, we have developed and acquired significant intellectual capital and proprietary data by strategically engaging with our customers and continuously developing our suite of services. Our differentiated knowledge and data uniquely position us to customize and improve our service offerings to meet our customers’ diverse needs and preferences.

•Operational scale – We process significant volumes of transactions. For the year ended December 2023, we used our core services to identify $22.9 billion in potential savings on $168.6 billion in claim charges. We also ingested approximately $400 billion in additional claim charges that were largely outside the scope of our core out-of-network repricing activities but which present meaningful opportunities to provide additional value to clients with our newer products and services. Our platform can integrate additional products or process additional volumes without substantial incremental investments in infrastructure or people. These economies of scale allow us to produce valuable services for our customers at lower unit costs than our competitors and to make significant investments in these services on behalf of our customers.

•Unique products and capabilities, including:

◦Broad range of out-of-network solutions– We believe no single competitor currently offers the same breadth of out-of-network cost management services that we provide. Our ability to offer flexible packages of solutions to all segments of the market, ranging from a point solution to fuller configurations, enables us to meet the diverse needs of our customers, who serve plan sponsors with widely varying health plan sizes and health benefit needs.

◦A nationwide network of over 1.4 million contracted providers – Our provider network was developed discretely over the course of 40+ years and is supported by our credentialing and data management expertise, sophisticated matching engine, and a network development team consisting of over 100 professionals. The breadth of our provider network enables us to offer extensive, flexible network configurations to our customers.

◦Proprietary claim pricing methodologies that in some cases are supported by a patented benchmarking process and that produce high levels of provider acceptance based on their rigor, transparency, independence, and track record of producing fair and efficient reimbursements.

◦A team of over 400 expert claims negotiators and knowledge workers which solve the most complex repricing, payment integrity and subrogation cases at scale, supported by best in class data and analytics tools and AI-driven workflows.

◦Next generation data and decision science capabilities – Supported by an elite team of data scientists with healthcare domain expertise, we offer next generation, healthcare-focused data and advanced analytics that applies descriptive, predictive, and prescriptive analytic solutions to help customers optimize decision-making, plan performance, network configuration, and competitive positioning.

•Flexibility to respond to market changes and customer needs, supported by dynamic capabilities – We have developed capabilities that allow us to reconfigure, build, and integrate internal and external resources and competencies in response to changes in the markets in which we operate. These dynamic capabilities include new service and product development strategies, knowledge creation and retention strategies to turn new insights and learning into institutional knowledge, resource allocation strategies focused on the efficient distribution of our resources, and acquisition and alliance strategies that bring new resources and competencies into the Company from external sources. Our set of dynamic capabilities enables us to modify our existing operational strategies and processes to be highly responsive to evolving customer and regulatory needs and new market opportunities, as demonstrated by the introduction of our NSA services in 2022 in response to a significant regulatory change. We believe this flexibility is an essential feature of our customer value proposition and a durable source of competitive advantage.

Growth Strategy

As described above, MultiPlan has developed distinctive assets that include longstanding, strategic relationships with our customers and a proprietary data and technology platform that is deeply integrated with many of our customers' information technology environments in a highly customized manner and that occupies a unique position in our customers' workflow by accessing and processing claims prior to payment of those claims to providers ("pre-payment"). The cornerstone of our growth strategy is leveraging these distinctive assets to introduce and efficiently scale new products and service offerings to deliver more value to customers in our core and adjacent markets and to drive growth in our revenues and profits.

During the second half of 2022, the Company conducted a comprehensive review of its strategy to establish a renewed set of strategic goals. These goals include:

1. Accelerating long-term revenue growth;

2. Reducing the concentration of our revenues by product, customer, and channel;

3. Broadening our suite of services to address the full range of commercial (in-network) and government health claims flows processed on our platform; and

4. Increasing our penetration of government markets, including Medicare Advantage and Medicaid.

The renewal of our strategic goals resulted in the identification and prioritization of a set of growth initiatives aimed at capitalizing on the value of our distinctive assets. These growth initiatives, which collectively make up the Company's Growth Plan, include:

•Transforming into a product-centric organization and developing a deep pipeline of new products to be launched over the next several years, by deepening our product development team and reconfiguring certain workflows to better translate customer needs and market trends into effective product roadmaps;

•Enhancing our core services to bolster our competitive advantage and generate additional savings, by introducing new products and product enhancements to our core out-of-network claim pricing and payment and revenue integrity solutions as well as solidifying our leadership position in NSA services;

•Expanding our Value-Driven Health Plans ("VDHP" or "HST") platform to advance our objective of delivering a turnkey health plan solution for employer plan sponsors ("Employer Solution in a Box") and expand our presence in the TPA and direct to employer channels; and

•Forming a new Data & Decision Science Services line to add a suite of descriptive, predictive, and prescriptive analytics products that enable us to monetize our in-network commercial claims flows and increase our footprint in government markets.

During 2023, we made tangible progress on each of our growth initiatives. We named a Senior Vice President of Product and increased staffing of our product development team. In our core services, we introduced our Pro Pricer™ product, which leverages machine learning technology to dynamically route claims to our various repricing solutions for each individual customer to improve pricing recommendations, and we introduced functionality enhancements to our itemized bill review service, including the capability to use prepayment integrity analytics to mine claim data and prioritize the adjudication of high-dollar, multi-item inpatient facilities claims. We introduced our Balance Bill Protection™ product, enabling customers of our

VDHP (HST) platform to take advantage of our reference-based pricing solution while generally eliminating balance bills and alleviating abrasion between plan members, employers and providers. We formed our Data and Decision Science Services line and subsequently added a suite of data and decision science products through our acquisition of BST. We also added a B2B healthcare payments service through a joint marketing and services agreement with ECHO Health, to enhance the value we provide and our competitive position in certain targeted customer channels, including the third-party administrator and regional health plan channels.

Our Services

MultiPlan offers a broad range of services that allows our customers to manage the growing cost, risk, and complexity of healthcare and to meet the needs of a wide range of plan sponsors with varying plan sizes and benefit needs. Our service offerings can be used, either as a point solution or as a package of services, throughout the continuum of care to help plan members obtain quality care at an optimal price that is fair for all involved. Additionally, our out-of-network cost management services are often bundled together to provide a comprehensive cost management solution for Payors that optimizes our clients' business objectives.

Analytics-Based Services

Our Analytics-Based Services reduce the per-unit cost of claims using data-driven negotiation and/or reference-based pricing methodologies. These services can be used standalone but often are used in a solution hierarchy after MultiPlan's network services to reduce claims with no available network contract. Value-Driven Health Plan services bundle network and reference-based pricing to enable a blended benefit plan design. All of the services in this category leverage our information technology platform, public data sources, and the billions of claims that we have reviewed and are included in our 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 out-of-network claims based on a reference point. Most RBP programs in the market uses Medicare as the reference point. We also offer this option, but most customers elect to use our Data iSight program which uses facility cost as the facility reference point and median reimbursed amounts as the professional reference point. The facility pricing methodology features a patented benchmarking process that determines the cost of a group of like claims from like providers in the same geography. Both methodologies use data from readily available public and private sources which feed our 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 reduce balance billing. Our cost-driven approach was developed with input from healthcare facilities and was designed to address the typical issues providers have with reference-based pricing. As a result, we believe the propensity for providers to balance bill is materially lower than other similar services. Data iSight delivers provider acceptance of over 90% for facility and 96% for professional claims, and for those claims that are appealed, we successfully retain about 88% of savings through education and negotiation. We offer 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. Our 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.

Financial Negotiation. Our financial negotiation services assist Payors with pricing out-of-network claims from providers with whom neither the Payor nor MultiPlan have been able to secure a contractual discount. We handle 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 MultiPlan for pre-determined levels of discount to be automatically deducted on claims that would otherwise be individually negotiated. For those claims that are not automatically negotiated, MultiPlan works directly with the provider's office through our negotiations staff, which is aided by extensive workflow and benchmarking tools. Financial negotiation services are used by all types of Payors, most notably Blue Cross and Blue Shield plans, provider-sponsored and independent health plans. They are priced at a percentage of savings identified.

Surprise Billing Services. Introduced in 2021, our surprise billing services help Payors comply, or help their employer/plan sponsor customers comply, with the federal No Surprises Act ("NSA"), which became effective on January 1, 2022. The administration has issued two interim final rules (July 13, 2021 and October 7, 2021 ("IFRs")) and final regulations issued on August 26, 2022 (the "Final Rules"), as well as sub-regulatory guidance and proposed updates to the current regulations in reaction to litigation outcomes. In the fall of 2023, the administration published a proposed and final rule addressing payment for the IDR process under the NSA, as well as a substantive proposed rule intended to streamline the IDR process and improve communication between the parties. These IFRs, Final Rules, and sub-regulatory guidance documents have established and updated processes and timelines for dispute resolutions under the NSA and introduced 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. MultiPlan 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 steps require extensive data collection and analysis to identify claims as surprise bills under the law’s definition; calculate the new QPA introduced by the law and append it to the claim; create an initial payment amount for the claim, typically by using the QPA as the reference point; negotiate a settlement as needed; and take claims through an independent dispute resolution process as needed. In offering these new services, we leverage existing technology and expertise in data science, claim pricing, and negotiation. The services are used by all types of Payors that must comply with the NSA and are priced either as a percentage of savings for the end-to-end service, or on a per-claim basis for individual components.

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. Provider acceptance of the reference price is about 98%. Our VDHP service offerings enable a range of VDHP configurations, including a "standard" form of VDHP which integrates our PPO network for professional and select ancillary 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. Also, as described above, in 2023 we introduced our Balance Bill Protection™ product, which enables customers of our VDHP services to take advantage of our RBP solution while generally eliminating balance bills and alleviating abrasion between plan members, employers and providers. VDHP services are sold to employers directly using the broker/consultant channel, or through Third-Party Administrators ("TPAs"). Today, they are most in demand in the small and mid-sized group market. They are most commonly priced per-employee/member-per-month ("PEPM").

Network-Based Services

Our Network-Based Services reduce the per-unit cost of claims through contracts with 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 our 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 applicable network contract so the discount can be applied. We offer 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, our primary networks serve as the network for the Payor’s commercial health plans in a given service area in exchange for a PEPM rate, or as the Payor’s out-of-area extended primary network in exchange for a percentage of the savings identified. Our national primary network, branded PHCS Network, has been continuously accredited for credentialing by the National Committee for Quality Assurance ("NCQA") since 2001. We believe this provides assurances to employers/plan sponsors and plan members of the quality of providers in the network. Customers mainly include provider-sponsored and independent health plans; Taft-Hartley plans and TPAs, as it is more cost effective for these Payors to outsource this function than to incur the expense of developing and maintaining their own network of thousands of doctors and hospitals.

Complementary Networks. Our complementary networks provide customers with access to our 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 price 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.

Other Network Services. We also offer network build and network management services. Network build services comprise custom development of and/or access to primary network contracts, leveraging our 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/access service include MA and Medicaid health plans seeking assistance with expansion plans or help maintaining the required network adequacy. Network management services enable health plans to outsource key steps in their claim adjudication. We load proprietary or third-party network demographic and rate information and perform claim pricing as well as optional credentialing and data management services for claims associated to networks that aren’t owned by MultiPlan.

Payment and Revenue Integrity Services

Our Payment Integrity Services 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 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 our 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.

Clinical Negotiation. This is a specialized pre-payment integrity service targeting claims not reduced through a commercial healthcare Payor’s primary network(s). Eligible claims are taken through payment integrity analytics and a scoring process to identify scenarios where a clinical discussion with the billing provider is warranted. Based on the resulting score, a claim reduction is negotiated with the provider based on clinical findings and a signed agreement is obtained. This service is most commonly used by large commercial Payors, Blue Cross and Blue Shield plans, and provider-sponsored and other independent health plans. Claims are priced based on a percentage of savings identified. Clinical Negotiation also is integrated into MultiPlan's network pricing so the majority of customers benefit from this pre-payment integrity service.

Pre-Payment Clinical Reviews. Pre-payment claims utilize 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. The services target all claims, including a Payor’s in-network claims, and are most commonly used by large commercial and MA/Medicaid insurers, Blue Cross and Blue Shield plans, and provider-sponsored and other independent health plans. Services are priced based on a percentage of savings identified, where savings is defined as the difference between the allowed amount established by pricing the claim through its normal process and the corrected allowed established based on items/services flagged for removal during the review. Some of the services also are integrated into MultiPlan's network pricing and analytics-based services so the majority of customers benefit from our pre-payment integrity clinical review 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, MA 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 (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. These services are used by commercial, MA, managed Medicaid and state Medicaid Payors and are priced based on a percentage of savings identified and/or recovered.

Revenue Integrity Services (post-payment). Targeting issues unique to MA Payors, these services use data, technology, and clinical expertise to identify and restore underpaid premiums, and to improve accuracy of future premiums paid to MA plans by CMS. There are three services currently 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 MA 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 MA plan members where the Part D Pharmacy Coverage on file with CMS is inaccurate and effectuates corrections with CMS. The updated Part D information improves compliance, efficiencies and member satisfaction. These services are priced based on a percentage of the CMS premiums restored to the MA Payor. Part D OHI is priced per validated member with other primary Part D coverage.

Data and Decision Science Services

Our Data and Decision Science Services are comprised of next generation, healthcare-focused data and advanced analytics that apply descriptive, predictive, and prescriptive analytic solutions to help customers optimize decision-making about plan design, plan performance, network configuration, and competitive positioning. These services support virtually all types of Payors, including: employers, brokers and TPAs; medical, supplemental and stop-loss carriers; and benefit administrators and professional employer organizations ("PEOs"). The Company currently reports revenues from Data and Decision Science Services in Analytics-based Services, and will likely do so until revenues from this service line become more significant.

PlanOptix™. This healthcare price transparency software suite enables customers to quickly query and navigate over 500 billion records of machine-readable files ("MRF") with payor and provider pricing data across top national and regional payor organizations. The MRF data ingested by the software is enriched using MultiPlan and external data sources, including demographic and affiliate data derived from MultiPlan’s network of 1.4 million contracted providers. The software can be used by Payors and other health plan administrators to negotiate provider contracts, audit and research claims, gain insights into network performance, and make data-driven, actionable decisions. We believe the technology and data underlying PlanOptix can also be developed into software solutions that will be useful to employers, brokers and consultants, and providers.

BenInsights. This software platform enables Payors and employers to leverage their financial and clinical data to improve outcomes for employer plan sponsors and their advisors. BenInsights is integrated with over 160 carriers, TPAs, PBMs and other vendors to quickly and accurately aggregate a health plan’s data and produce dashboards and other financial and clinical reporting and decision tools. The platform also integrates risk models that identify emerging issues, Smart Cards that recommend targeted actions, and analytics that help optimize benefit plan design. This service is used by Payors and other health plan administrators, employers, and brokers and consultants.

Risk Analytics & Insights. These services complement existing actuarial-based modeling with next generation predictive and prescriptive analytics, including: risk models and Smart Cards that identify and address emerging issues; automated underwriting to improve plan pricing; and other analytics that enable insights and recommendations for government and commercial health plans of all sizes. Among other features, Risk Analytics & Insights services can utilize MultiPlan’s prepayment claims flows to help identify emergent risks by individual, group, or condition and to prescribe financial and clinical program enhancements that help manage these risks. These services are used by commercial, MA, managed Medicaid and state Medicaid Payors.

Supplemental Carrier Services. These services are provided to supplemental and stop-loss health insurance carriers and address pressure from employer groups and policyholders to increase the value of the policies by deploying technology to increase the likelihood that a benefit is identified and paid to the policyholder. Our Digital Claiming service integrates medical claims, to identify, notify and automatically pay supplemental benefits. We receive medical claims files from medical carriers and identify claims that are potentially eligible for reimbursement, using algorithms that map the policy benefits of supplemental plans to the medical claims files. Carriers use our technology to identify claims exceeding a confidence score and then disseminate messages that encourage policyholders to file a claim.

Markets We Serve

Through our four primary service categories, we provide solutions that address four major market segments: commercial healthcare payors, government healthcare payors, property and casualty healthcare payors, and supplemental health insurance carriers. The following table represents which of our market segments we target with each of our primary service categories.

Substantially all of MultiPlan's services are available in all 50 U.S. states and the District of Columbia. All services are available to all applicable customers regardless of geographic location, company type or size.

Commercial Health

Commercial healthcare accounted for about 29% of the total $4.5 trillion U.S. medical spend in 2022. Commercial health plans are offered either as a insured program where the plan sponsor – typically an employer – and its members pay a monthly premium and the insurer pays the medical costs from those premium dollars, or as self-insured plans funded by the employer/plan sponsor and its members from a pool of funds earmarked for this purpose. Self-insured plans are typically administered by insurance companies or TPAs. Often, particularly for the national insurers, this "Administrative Services Only" ("ASO") business is larger than the fully-insured business in terms of membership. Nationwide as of 2021, we estimate that membership in ASO plans is about 110 million, or 60% of total membership in commercial health plans. As of year-end 2022, and consistent with MultiPlan’s revenue mix, the four largest publicly-held commercial health insurers reported that approximately 80% of their commercial membership was in self-insured plans. Between 2012 and 2022, enrollment in self-insured plans increased by an average of nearly 3% per year, and future growth of self-insured plans is expected to outpace that of fully-insured plans and overall private employment, as employers of all sizes seek greater flexibility in health plan design.

MultiPlan services benefit both fully-insured and self-insured health plans. We work with fully-insured plans directly, including national insurers, Blue Cross and Blue Shield plans, provider-sponsored and independent health plans. Because these entities are responsible for paying for medical claims, they are typically focused primarily on cost management and billing and payment accuracy with member features given less emphasis. These plans favor MultiPlan’s Analytics-Based Services, and in particular RBP, over Network-Based Services. We work with self-insured plans primarily through their plan administrators, which include the same types of companies as well as TPAs and sometimes the employers/plan sponsors themselves. Over 85% of our 2023 revenues are attributed to self-insured plans that we service through their Payors or directly.

According to a Kaiser Family Foundation's Employer Health Benefits survey, annual healthcare premiums for family health coverage exceeded $23,968 in 2023, with employees paying over $6,575 toward their cost of care. Self-insured plan sponsors are responsible for paying medical claims as well as for the satisfaction of their plan members. In a tight employment market, particularly with large employers, choice of benefits and member satisfaction concerns may have equal or more weight than medical cost. This leads to the need for Payors to offer variety in plan designs, and according to Kaiser Family Foundation, over two-thirds of large employers offer at least two benefit plan options to their employees. Consequently, these plans often include Network-Based Services in their service hierarchies and/or use the "standard" VDHP services that integrate the professional PPO network in order to generate savings for both the plan and plan member. Larger Payors servicing self-insured plans also have extensive customized processing logic to support plan design variability as the labor market shifts, and one such customer has well over 100,000 such rules in place.

The commercial health segment also includes individual health plans which are fully-insured and which may or may not be sold through the Affordable Care Act exchanges. MultiPlan supports individual plans through the insurance companies offering these plans and does not sell to individuals directly.

Government Programs

This market segment includes Medicare, Medicaid, TRICARE, Federal Employees Health Benefits, Veterans Administration and other federal health programs (state and municipal government health plans typically are managed as commercial plans). Commercial insurers and health plans also participate in this market segment, but there also are Payors that operate government plans exclusively. Most, but not all, of MultiPlan’s commercial healthcare services also are of value to Payors of government programs.

Medicare Advantage plans serve the Medicare-eligible population in a private plan alternative to traditional Medicare. Kaiser Family Foundation reports that enrollment in MA plans more than doubled over the last decade. As of 2023, an estimated 30.8 million people were enrolled in MA plans compared to 28.4 million in 2022. MA Payors have a greater need for billing and payment accuracy than they do for cost management, because healthcare prices largely are set. With the growth this segment has and continues to see, there is heightened competition among Payors, which also drives the need for assistance in building network access. Today, these Payors use MultiPlan’s payment and revenue integrity services. They may also outsource some portion of their provider network development to MultiPlan. Additionally, following our acquisition of BST, we expect to use our Risk Analytics & Insights services to help MA Payors manage risks, which include the need to accurately predict healthcare costs of enrollee care to balance actual costs with the capitated premiums received from the CMS.

Medicaid and Managed Medicaid. An estimated 83.0 million people were enrolled in Medicaid and 7.0 million were enrolled in CHIP (Children’s Health Insurance Program) plans as of August 2023. This reflects a decrease of approximately 0.6% and 1.3%, respectively, over August 2022 figures. As of 2021, 85% of Medicaid enrollees were in a managed Medicaid program. Enrollment has been growing as a result of the Medicaid expansion allowed under the Affordable Care Act. As of December 2023, 41 states including the District of Columbia have expanded or have committed to expand their Medicaid programs. The most recent growth is likely attributable to the Families First Coronavirus Response Act ("FFCRA"), which created a temporary increase in the Medicaid Federal Medical Assistance Percentage ("FMAP"). As with MA, MultiPlan’s services in this segment have until recently been primarily limited to payment integrity services with some custom network development of use to bidders winning state Medicaid business under a request for proposal ("RFP"). As with MA, following our acquisition of BST, we expect to use our Risk Analytics & Insights services to help Payors in this segment manage their risks.

Other Programs. We have a history of developing custom networks for TRICARE and Veterans Administration programs. These are RFP driven, and MultiPlan partners with one or more Payors bidding on the business.

Property and Casualty

This market segment includes Payors of the medical services arising from work-related injuries and auto accidents, as well as other types of property and casualty insurance. There is little overlap between the commercial and government Payors and those in this segment. The insurers are often serviced by third parties that perform bill review services that include access to provider networks. We typically work with these service providers versus the carriers directly.

Workers' Compensation. Workers' compensation insurers must pay both the indemnity costs and the medical costs associated with an injured worker. Recent trends in medical cost inflation have become a major driver in the overall cost growth for workers' compensation insurers. As of 2022, medical services accounted for about 50% of workers' compensation claims costs compared to 40% in the early 1980s. Rising medical costs have increased focus on cost management measures for the medical portion of workers' compensation insurance claims. We provide network access and pre-payment integrity services to these Payors. Our analytics-based services are used to a lesser extent, primarily because the majority of states have established provider reimbursement fee schedules, in the absence of a network contract that provides other benefits to the Payor.

Auto Medical. Auto insurance carriers face costs from auto damage and medical claims. Economic losses for bodily injury liability claims increased 10% annually from 2012 – 2017, well above the 3% annual medical inflation rate, with medical expenses accounting for 79% of claimed losses. With ongoing medical cost inflation, this trend is expected to continue into the future. MultiPlan’s value in this segment is similar to the Workers’ Comp segment – providing network access and payment integrity services primarily, with some activity in analytics-based services where state fee schedules are not in place.

Supplemental Insurance. The total annualized in-force premium for the employer-based supplemental health insurance industry was just over $11.3 billion at end of 2022. The top 10 carriers make up over 80% of this market, and, through our acquisition of BST, MultiPlan contracts with 6 of the Top 10 carriers. Products sold by these carriers include Accident, Critical Illness, Hospital Indemnity, Cancer, and other miscellaneous policies. In this segment, we use data and decision science tools to help carriers identify opportunities to pay claims to policyholders, which addresses pressure from both employer groups and policyholders to increase the value of supplemental insurance by accurately and swiftly paying claims.

Customers

MultiPlan wholesales its services through multiple channels to a broad and diverse set of customers and end users, including large Administrative Services Only ("ASO") providers, fully-insured carriers, regional payors, third-party administrators, brokers and consultants, and property and casualty and other supplemental insurance carriers. We work directly with over 700 Payors to manage medical cost and billing and payment accuracy for their ASO, self-insured employers/plan sponsors and fully-insured health plans where applicable. We serve national and regional insurance companies, Blue Cross and Blue Shield plans, provider-sponsored and independent health plans, TPAs, property and casualty insurers, bill review companies and other companies involved in the claims adjudication process on behalf of commercial and government health plans or property and casualty insurance policies. Through our HST subsidiary we also work with employers directly and through their brokers/consultants. We indirectly serve the consumers accessing healthcare services through these diverse channels.

We believe we have strong relationships with our customers, which include substantially all of the largest health plans and their ASO platforms. Contract terms with larger customers are often three years and as many as five years, while mid- to small-sized customer contracts are often annual and typically include automatic one-year renewals. We continue to experience high renewal rates and our top ten customers based on full year 2023 revenues have been customers for an average of over 20 years. Our customer relationships are further strengthened by the fact that MultiPlan is electronically integrated with its customers in their time-sensitive claims processing functions, and we support highly flexible benefits offerings to an extensive group of customers who often feature a MultiPlan logo on membership cards when our networks are used.

Although the end beneficiaries of our services are employers and other plan sponsors and their health plan members, our direct customers are typically payors, including ASOs and third-party administrators ("TPAs"), who go to market with our wholesale services to those end customers. We estimate that in 2023 our customers served over 100,000 self insured employers/ plan sponsors actively using our services through the ASO distribution channels and direct relationships, which generated over 85% of our combined Network and Analytics revenues in 2023. Three customers individually accounted for 25%, 22% and 8% of revenues for the year ended December 31, 2023, three customers individually accounted for 32%, 20% and 10% of revenues for the year ended December 31, 2022 and three customers individually accounted for 34%, 19% and 10% for the year ended December 31, 2021. The loss of the business of one or more of our larger customers could have a material adverse effect on our results of operations. However, at the plan sponsor level, our revenues are dispersed across a broad array of employers/plan sponsors who choose MultiPlan's offerings as their out of network solution and revenue concentration is significantly lower. Within the ASO channel, the top 10 self-insured plan sponsors represent less than 9% of our combined Analytics and Network revenues in 2023.

Network

We believe we have the largest independent provider network outside of the top national Payors, with over 1.4 million healthcare providers as of December 31, 2023. The breadth of our provider network enables us to offer extensive, flexible network configurations to our customers, which we believe is a competitive advantage. Our team of approximately 100 network development professionals manages these network relationships across our Primary and Complementary PPO Networks. For existing providers, the goal of the network development team is to strengthen our existing provider relationships, help providers maintain participation across products and increase the discounts the providers extend to our customers that utilize our provider networks.

In addition, the network development team is responsible for executing new contracts with providers that are not currently affiliated with our networks, either on behalf of our own network or on behalf of a Payor that seeks to outsource its network contracting function. The network development team manages a sophisticated program of data mining, profiling, recruiting and ultimately contracting with new providers to increase the value provided to customers. An incentive driven pay-for-performance plan measures and rewards the success of our network development team.

Information Technology

The Company has made significant investments in data and technology assets over its history, including over $600 million of capitalized software development cumulatively, to create a data and technology platform that is deeply integrated with many of our customers' information technology environments in a highly customized manner and that occupies a unique position in our customers' workflow by accessing and processing claims prior to payment of those claims to providers ("pre-payment"). This prepayment position allows claims to be repriced if out-of-network, or screened for payment integrity issues such as fraud, waste and abuse. This common platform provides a single interface to multiple products and operates at scale. It contains 10 petabytes of structured and unstructured data across dozens of public and proprietary data sources, 330 different applications, and 400,000 custom business rules that help orchestrate our customers’ diverse workflows, and it is supported by over 5,000 servers, and over 900 technology professionals. The IT infrastructure underlying our platform provides flexibility to process additional volumes or integrate new products, without substantial incremental investments in infrastructure or people. We believe our platform is among our most differentiated competitive advantages, and leveraging our platform to expand our suite of products and solutions and to add more value to the significant volumes of in-network, Medicare Advantage and Managed Medicaid claims flows already processed through our platform is a critical objective within our growth strategy.

We have made significant investments in our IT infrastructure to enable us to automatically process significantly more transactions with greater accuracy and greatly improve our capacity to continuously serve our customers. In 2023, our prepayment Payment Integrity and reference-based pricing services returned 99% and 97%, respectively, of claims within one day. Our proprietary network repricing application is capable of returning approximately 99% of repriced claims to our Payor customers on the same day. Our proprietary negotiation application features portal technology with electronic signature acceptance, sophisticated claim distribution and prioritization algorithms enhanced with machine learning. We have implemented connectivity via Electronic Data Interchange ("EDI") or direct integration using web services with all of our top customers. During 2023, the majority of claims processed in our system were received via EDI or direct web service integration, with some claims now being received via Fast Healthcare Interoperability Resources ("FHIR") Application Programming Interface ("API"). As we process more claims through EDI, direct web service integration, and APIs, our substantial back-office interconnectivity significantly reduces complexity and the number of processing errors. We process approximately 25 million claims every month, continuously growing our data assets and enhancing our ability to meet the needs of our customers.

We continue to invest in data science capabilities, including in machine learning and artificial intelligence. We expanded our internal team in 2022 and added to our team and capabilities with the acquisition of BST in 2023. Our data science department includes 25 data scientists, including nine with PhDs. Over the last three years, our data science applications have won multiple awards, including the "Best Healthcare InsurTech Solution Provider" award in the 2023 MedTech Breakthrough Awards.

Sales and Marketing

Our opportunity to distribute new products and solutions to our vast base of existing customers is a key competitive strength, and capitalizing on this opportunity, along with selling to new customers, is a cornerstone of our growth strategy. Also, we believe maintaining high-level customer service and engaging strategically with our customers have been differentiators of MultiPlan’s customer value proposition. To support these efforts, we have invested in significant sales and marketing assets, including a team of experienced sales and account professionals who have intimate knowledge of the industry, customer needs, and our suite of solutions.

Our 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 our customers, leveraging our 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, 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 our 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. The market-focused account managers are responsible for relationship management as well as for growing revenue through expanded use of services. They are compensated with a base salary plus a bonus and commission based on customer retention and revenue from upselling new products. The sales professionals are compensated with a base salary plus commission based on revenue from new customers. Sales and upselling efforts are supported by a marketing team which generates leads, builds brand awareness, implements and educates customers and develops proposals.

Sales and customer retention efforts are supported by a growth-focused marketing team which builds brand awareness, crafts product positioning and messaging, promotes thought leadership, equips customer and prospect conversations, and generates and nurtures leads. We craft innovative and effective marketing programs that use various methods, focusing on audience engagement and ultimately revenue generation – including our digital presence on website and social media channels, as well as our in-person presence at customer meetings and industry conferences.

Our Competitors

We compete with other companies in our markets on the basis of the effectiveness of our cost-saving solutions, the quality of our customer service, and the prices of our services. We believe no single competitor currently offers the same breadth of services we provide. The breadth of our services exposes us to a broad range of competitors as described below. Any businesses we acquire in the future may introduce us to additional competitors. Our competitors vary by service, as follows:

Analytics-Based Services. MultiPlan competes with a variety of medical cost management companies for negotiation, reference-based pricing and surprise billing services. We compete for these services on the basis of savings effectiveness, provider acceptance, and plan member satisfaction. Our workflow and claim processing technology, user interaction and data and analytic tools are key competitive advantages. MultiPlan's competitors for these services typically are reference-based pricing services. They include 6Degrees, AMPS, ELAP Services, Payer Compass, Zelis, ClearHealth Strategies and Naviguard.

Network-Based Services. We compete directly with other independent PPO networks, which are primarily regional, and with PPO network aggregators on the basis of network discounts, access, quality and price. PPO aggregators offer national access by patching together third-party networks, in some cases including MultiPlan's network. While aggregators rely on third-party networks, MultiPlan's network features direct contracts with 98% of its participating providers. MultiPlan's competitors for these services typically include First Health, TRPN, and Zelis. We also compete with PPO networks owned by our large Payor customers, primarily on the basis of independence and flexibility. Our nationwide Primary PPO Network has held NCQA accreditation since 2001, which we believe provides assurances to Payors and consumers regarding the quality of the providers in our network.

Payment and Revenue Integrity Services. We compete with a variety of larger and smaller vendors of payment and revenue integrity services. Our Payment Integrity services compete on the basis of analytic breadth and depth, human expertise and scope. Virtually all payment integrity competitors originated as post-payment specialists and to varying degrees have migrated services to a pre-payment modality, while our services were built to focus on examining claims before payment occurs and now, with the 2021 acquisition of DHP, we have a broader capability to address post-payment integrity. Our Revenue Integrity services compete on the basis of identification of and assistance in restoration and preservation of underpaid premiums from

CMS caused by member eligibility and status errors. Our competitors for these services typically include Optum, Conduent, Cotiviti, Inc., SCIO and The Rawlings Group.

Data & Decision Science Services. We compete with a variety of vendors in each of the main product categories in our Decision & Decision Science service line. Our PlanOptix price transparency solution competes with a solution offered by a strategic alliance between Turquoise Health and Milliman. Our BenInsights data warehouse and analytics solutions competes with solutions offered by Cotiviti, HDMS, Artemis and Merative. In risk modeling and digital underwriting, we compete with solutions offered by Milliman, Gradient AI, 3M and John Hopkins ACG. Our digital claiming service competes with solutions offered by Nayya and Alight. Our advanced analytics solutions compete with solutions offered by Milliman.

Human Capital

Our employees are among our most critical assets. Their talent, expertise, and dedication help us achieve our mission of bringing a more fair, efficient, and affordable system to the U.S. healthcare industry. As of December 31, 2023, we had approximately 2,800 employees, substantially all of whom are full time employees and none of whom are covered by unions. We believe we have a good relationship with our employees, and that belief is validated by the results of external employee engagement surveys in which we participate.

MultiPlan annually participates in the Great Place to Work® survey to understand how our employees perceive company culture and work environment. In 2023, we received improved scores from employees across all questions and categories. This improvement in responses resulted in a 90% overall satisfaction score – a 4% increase from 2022 and well above the 57% overall satisfaction of employees at a typical U.S.-based company.

We believe that by investing in our employees, we are building a foundation for long-term success and continued growth. We offer a range of resources and benefits to help our people grow and develop their careers, and we strive to create an environment where all employees feel valued, supported, and empowered. We aspire to a culture built upon shared values that emphasize respectful communication, inclusivity, effective collaboration, innovation, and a commitment to high standards of behavior and performance.

Some examples of the investments we make in supporting and developing our employees and our culture include:

Compensation and Benefits. We offer competitive pay and a robust benefits package, including, among other benefits, healthcare benefits, flexible spending accounts, health savings accounts, life insurance, short-term and long-term disability plans, a generous paid time off ("PTO") policy, and a 401(k) Plan with employer match. We believe investing in our employees’ physical, mental, and financial health to promote their overall well-being is both our ethical obligation and important to helping our employees contribute to our organizational mission and goals.

In 2023, we launched an employee stock purchase program ("ESPP") for eligible employees to support our objective of attracting, retaining and motivating talented employees. The program offers shares at a 15% discount and provides an opportunity for employees to participate in the ownership of the company. The ESPP has been positively received with robust levels of participation among our employee base.

In addition, the MultiPlan Scholarship program is offered to children of MultiPlan employees who wish to continue their education after high school to achieve their educational goals. The total amount of new scholarship awards granted in 2023 was $100,000.

Through our MultiPlan Helping Hands program, we are able to provide financial assistance for employees experiencing hardship; the program is funded 100% from employee donations and is administered by the Helping Hands Committee, comprised of MultiPlan employees.

MultiPlan ACTS: Four Pillars of Success. Our core values are Accountability, Continuous Improvement, Teamwork, Service Excellence ("ACTS"). These values serve as guiding principles that help us maintain high standards of personal conduct, instill a common understanding of our approaches to decision making and how we work together to achieve our goals, and shape our culture. They are also critical to positively impacting and supporting the needs of our various stakeholders, including our customers, employees, owners of our securities, and the communities in which we operate. We integrate ACTS across our people initiatives and interactions. This includes leveraging our values to define the competencies and responsibilities related to each role at MultiPlan. In practice, these competencies are used to align employee-manager expectations and recognize the contributions team members make to the advancement of our corporate goals and to their own personal and professional development.

Integrity and Trust. MultiPlan is committed to always conducting our business with integrity. This commitment forms the foundation of our business success, maintains our culture of honesty and fair play throughout our operations, and sustains our company’s reputation for excellence. Everyone shares that responsibility, and that’s why every employee is required to become familiar with our Code of Business Conduct and Ethics (the “Code”). New employees receive training and attest that they have read, understand and agree to the Code within the first 30 days of employment. Thereafter, employees are required to recomplete training each year. This Code embodies our company’s principles and the way we do business, which include giving equal opportunities to all employees and job candidates, and compliance with all laws, rules, and regulations applicable to our business. This important document can be found on our Investor section of our website at https://investors.multiplan.us/governance/governance-documents/default.aspx.

EthicsPoint is MultiPlan’s hotline for reporting any concerns that employees do not feel comfortable reporting through other channels. While MultiPlan receives high survey scores pertaining to employees’ level of comfort reporting their concerns to management, we believe it is important that employees have multiple avenues for raising, reviewing and resolving concerns in a way they are most comfortable, including confidentially.

Diversity Inclusion and Belonging. MultiPlan strives to foster a culture and atmosphere of mutual respect and understanding for individuals from all backgrounds, perspectives, and abilities, and to leading positive change in our local communities. Our Diversity, Inclusion, and Belonging ("DIB") Plan defines the priorities and activities that support our objective of attracting, retaining, and promoting a diverse and respectful workforce. We dedicate significant people, time, and resources to help drive our DIB initiatives.

Our DIB Plan also includes established policies that specify our expectations and guide the behavior of our employees and our partners. As part of this effort, we are in the process of developing a Supplier Diversity Program which will be a key initiative in 2024-2025.

As part of the annual training initiatives, MultiPlan believes continuing education is essential to achieving its DIB objectives. Employees are expected to dedicate five hours each year to DIB education, including a baseline course provided by the Company to establish a foundation of expectations. The remaining time is self-directed, self-reported, and determined by individual educational needs and interests. DIB educational resources are also curated by a diverse team of MultiPlan employees and peer recommendations are promoted routinely. In addition, employees are invited to publicly pledge support to MultiPlan’s efforts to positively impact its employees and local communities, and to foster a culture of mutual respect for individuals from all backgrounds, perspectives, and abilities.

In 2023, in the survey conducted as part of our designation as a Great Place to Work company, 95% of our employees that responded to the survey said that MultiPlan is committed to diversity and inclusion and that people of all cultures, abilities, and backgrounds are respected and valued at MultiPlan.

Finally, our Charitable Giving Committees support local and national communities through employee fundraising and volunteer efforts targeting underserved and underprivileged populations.

Learning and Development. We place an emphasis on developing diverse and talented individuals at all levels of our organization by investing in their professional growth. Our dedicated Talent Growth and Development Team, in collaboration with our managers, is focused on providing our employees with access to the resources they need to succeed throughout their careers. We offer a range of required and optional talent development programs, including partnerships with vendors that offer a variety of business, professional and technical learning opportunities. The training programs span from self-directed learning to live in-person workshops. We provide role- and leadership-based programs, in addition to opportunities for external skills development with the potential for tuition reimbursements. Tailored training is also available for departments to learn more about specific topics that align with business objectives and their specialized goals. In 2023, we provided more than 600 educational opportunities equating to 49,000 hours of training.

Internal Recognition and Performance Acknowledgments. MultiPlan seeks to foster employee satisfaction, engagement, and productivity by openly recognizing the positive impact our employees make on their peers and the Company. Our MultiSTAR – MultiPlan Service Talent Achievement & Reward – recognition program provides formal and informal avenues for employees to acknowledge their colleagues’ contributions and demonstrations of our shared values. MultiSTAR’s multi-tiered award system enables employees to celebrate cultural holidays, career milestones, post thank you notes on a public or private feed, and recommend monetary awards based on different levels of accomplishment.

Performance Management Program. MultiPlan has established a set of core competencies for all employees to navigate a successful career at the Company. Annually, leaders work together with employees to establish goals and development plans that give employees a clear direction for success. All managers are encouraged to continuously assess goals, development plans and employee performance. This program and the performance management system enable managers to set expectations and gauge progress throughout the year.

For more information on the topics above, please see our ESG report that can be found on our website at https://www.multiplan.us/.

The information contained on, or that may be accessed through, the Company’s websites is not incorporated by reference into, and is not part of, this Annual Report on Form 10-K.

Government Regulations

We believe that each of MultiPlan's service offerings bears less regulatory risk than other healthcare businesses that bear insurance risk and bill federal healthcare programs or directly provide care. While we support customers that are regulated entities, we generally are not directly regulated and face significantly lower levels of regulatory complexity. We function as a transaction processor and we believe we have limited risk for services or billing.

MultiPlan does not deliver healthcare services; provide or manage healthcare services; or provide care or care management. Our business is compensated directly by private Payor customers, not by Medicare, Medicaid or other government healthcare programs. In some instances, we provide services to Payors that contract directly with a federal or state agency. In those instances, we may be subject to certain federal and state law requirements associated with those programs as a First Tier, Downstream or Related entity (FDR). As an FDR to these customers, we are subject to requirements which prohibit an individual or entity who has been convicted of program-related crimes or other violations from providing services to, or receiving payment from, government healthcare programs. Further, we are subject to affirmative legal obligations, as well as contractual requirements with our customers, to check the exclusion status of the individuals and entities we employ against lists of excluded individuals and entities prior to entering into employment or contractual relationships with them, and to periodically re-check such lists thereafter, or run the risk of liability under civil monetary penalties laws or a breach of our contractual obligations. We are also required to provide access to contracts, books and records pertaining to services performed in connection with federal or state agency contracts. A failure to comply with FDR requirements or violations of healthcare laws could subject us to audits, corrective actions, contract terminations, criminal or civil penalties, and/or debarment or exclusion from government healthcare programs.

Through our customer relationships, we are subject either directly or indirectly to federal and state laws and regulations that govern privacy, security and breaches of patient information and the conduct of certain electronic healthcare transactions. These transactions, include, for example, HIPAA, which imposes rules protecting individually identifiable health information and setting national standards for the security of electronic PHI. We are a "Business Associate" (as defined by HIPAA) of our customers. As such, we 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. Violations of such provisions may result in civil monetary penalties, resolution agreements, monitoring agreements, and, in certain circumstances, criminal penalties including fines and/or imprisonment. HIPAA also authorizes state attorneys general to file suit on behalf of their residents. Although HIPAA does not create a private right of action allowing individuals to sue in civil court for violations, the laws and regulations have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of patient information. In addition to HIPAA, there are federal and state laws that protect types of personal information that may be viewed as particularly sensitive, including substance abuse information, genetic information, HIV/AIDS status, and mental health information. The Federal Trade Commission has also interpreted existing consumer protection laws to impose standards for the collection, storage, processing, use, retention, disclosure, transfer, disposal, and security of information about individuals, including health-related information. State privacy laws are changing rapidly. Massachusetts and New York, for example, have enacted regulations and statutes that require any entity that holds, transmits or collects certain personal information about their residents to adopt a written data security plan that meets the requirements set forth in the statute, and to timely report certain unauthorized access to, or disclosure of, that data. In California, the CCPA, as amended by CPRA, provides California residents with a number of privacy-related rights and is more stringent in many respects than other state laws currently in effect in the United States. Further, each year a number of proposals related to data privacy or security are considered before federal and state legislative and regulatory bodies, including in a number of states considering consumer protection laws similar to those that currently exist in California, Colorado, Connecticut, Utah and Virginia. In 2023, Montana, Oregon and Texas adopted laws regulating the permitted use and security of certain personal information and we expect additional states to do the same in the coming years. In 2023, states such as Washington, Connecticut, and Nevada enacted broadly applicable laws to protect the privacy of personal health information, which generally requires consent for the collection, use, or sharing of any “consumer health data”, which may include personal information that is linked or reasonably linkable to a consumer and that identifies a consumer’s past, present, or future physical or mental health. These laws are contributing to increased enforcement activity and may also be subject to interpretation by various courts and other governmental authorities.

In addition, we are subject to certain state licensure and/or certification laws and other state and federal laws and regulations governing our operations and our products. Among other examples, contracts governing our relationships with healthcare providers may be subject to the federal Anti-Kickback Statute, federal False Claims Act and comparable state laws, as well as state laws prohibiting fee-splitting and the corporate practice of medicine and state and federal laws regarding transparency. The federal False Claims Act, for example, prohibits knowingly submitting or causing to be submitted false claims or statements to the federal government, including to the Medicare and Medicaid programs. The law contains whistleblower provisions, which allow private individuals (known as relators) to sue on behalf of the federal government for conduct that defrauded the federal government. The government has used the FCA to prosecute Medicare and other government healthcare program fraud such as billing for services not provided, coding errors, and providing care that is not medically necessary or that is substandard in quality. In addition, the government or a relator may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act. States have similar false claims act laws. Failure to comply with such laws can result in civil or criminal liability such as penalties, fines, and/or exclusion from federal healthcare programs. Furthermore, we may be subject to some state laws regulating the ability of PPOs to allow broad access to their provider networks.

We may also directly or indirectly be subject to state and federal regulation regarding the payment of out-of-network claims, including regulations regarding the determination of payment amounts and what data and other factors are permitted to be used by commercial health Payors and other Payors in making such determinations, as well as regulations targeting surprise billing and requiring transparency. For example, effective January 1, 2022, the NSA prohibits certain out-of-network providers from charging patients an amount beyond the in-network cost sharing amount for services rendered, subject to limited exceptions. For services for which balance billing is prohibited, the NSA establishes an independent dispute resolution ("IDR") process for providers and Payors to handle payment disputes that cannot be resolved through direct negotiation. The law is being implemented through several Interim Final Rules and Final Rules, as well as other guidance issued by the U.S. Department of Health and Human Services and other governmental entities. We expect additional guidance and regulations that may continue to change our understanding of the obligations of our customers under the NSA, such as a substantial IDR Operations proposed rule addressing aspects of the IDR process that is likely to be finalized in 2024, which will require updates to processes and impose additional compliance obligations for our Payor customers. Additionally, there remains a handful of lawsuits challenging portions of the NSA in federal courts. The Texas Medical Association, an industry group for physicians, and LifeNet, an air ambulance provider, have each brought three lawsuits, and the Texas Medical Association has brought an additional fourth lawsuit, all challenging aspects of the NSA's implementing regulations and technical guidance published to date. The first lawsuit was appealed and then voluntarily dismissed when the administration published a Final Rule incorporating the required changes from the decision. The fourth lawsuit is also resolved, with the administration finalizing updated regulations at the end of 2023 to address IDR fees, and the substantial IDR operations proposed rule addressing the batching rules. The second lawsuit, focused on how the QPA value (i.e., the median contract rate) is to be handled by IDR Entities making payment determinations, is pending appeal. Also pending appeal is the third lawsuit, which challenges several aspects of how the QPA must be calculated for all claims subject to the NSA, as well as certain air ambulance matters. The administration has updated the technical guidance in accordance with the litigation outcomes, but further changes may result from appellate outcomes in the future.

In addition to enacting the NSA, the Consolidated Appropriations Act ("CAA") also revised and clarified requirements of the Mental Health Parity and Addiction Equity Act ("MHPAEA"). The MHPAEA, enacted in 2008, prohibits health plans from providing less favorable mental health and substance abuse disorder benefits than medical/surgical benefits, whether measured in terms of quantitative treatment limitations or non-quantitative limitations ("NQTLs"). Specifically, the MHPAEA prohibits imposing NQTLs on mental health or substance abuse disorder benefits without performing comparative analyses on what impact those NQTLs will have. Plans are required to provide these comparative analyses to the Department of Labor upon request, and the Department of Labor is required to review at least 20 health plans for mental health parity each year. In 2021, the Department of Labor reviewed over 100 plans, and determined that none of the comparative analyses were sufficient as initially submitted. In 2023, the administration released a substantial proposed rule that would impose additional requirements on plans and issuers with respect to the comparative analyses. A final rule could be published in 2024, adding layers of complexity to the process for our Payor customers. To support our customers, MultiPlan has initiated an annual process to review the prior year and create comparative analyses for aspects of our services related to network participation, credentialing, and other processes to assist customers in completing their own analyses. Additionally, states have begun to impose or update their own mental health parity initiatives, some of which require heightened annual reporting.

We may also be, directly or indirectly, subject to regulation in some states governing the submission of true and accurate claims, or regarding the application of payment integrity edits to claims, including regulations impacting what data and other factors are permitted to be used by commercial health Payors and other Payors in making such determinations. Our services may directly or indirectly be subject to state regulations specifically covering certain categories of customers, such as workers compensation insurers and auto medical insurers. We regularly monitor legislative and regulatory activity in all states and at the federal level that could impact any of the products we offer in all relevant market segments. In addition, we are committed to supporting our customers in meeting their regulatory obligations, so we work cooperatively with them in establishing processes and procedures that comply with applicable requirements.

While we believe that we are in compliance with such laws and regulations and we will undertake efforts to comply with new laws and regulations, once effective, a failure to comply with these laws and regulations could adversely affect our contractual relationships and possibly expose us to civil or criminal sanctions by federal or state authorities. Please see the section entitled "Risk Factors — Risks Related to our Business and Operations."

Corporate History and Background

Our Company was founded in 1980 as a New York-based hospital network and has evolved both organically and through acquisitions from that regional network to a leading independent national PPO player, and then to a data analytics and technology-enabled end-to-end cost management, payment and revenue integrity services company. In addition to the acquisitions of Benefits Science LLC ("BST"); Launchpoint Ventures, LLC d/b/a Discovery Health Partners; and HSTechnology Solutions, Inc. ("HST"), in 2023, 2021 and 2020, respectively, other notable acquisitions were BCE Emergis Corporation, in 2004, which extended network access nationally and added a negotiation services platform; Private Healthcare Systems, Inc., in 2006, which added a National Committee for Quality Assurance (NCQA)-accredited, national primary PPO network; Viant Holdings, Inc., in 2010, which added analytics-based services and additional network access including for MA and Medicaid plans; National Care Network, LLC, in 2011, which added the Data iSight pricing service; and Medical Audit and Review Solutions, Inc., in 2014, which added pre-payment integrity services.

We became a publicly-traded company in October 2020 as the result of a merger with a publicly-traded special purpose acquisition company, Churchill Capital Corporation III ("Churchill"). Churchill was incorporated in Delaware on October 30, 2019 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On July 12, 2020, Churchill entered into the Merger Agreement by and among First Merger Sub, Second Merger Sub, Holdings, and MultiPlan Parent. On October 8, 2020, the Merger was consummated and the Transactions were completed. In connection with the Transactions, Churchill changed its name to MultiPlan Corporation and The New York Stock Exchange ticker symbol for its Class A common stock to "MPLN". The Company's warrants traded on The New York Stock Exchange until January 22, 2024 but now trade over the counter under the symbol "MPLNW".

Available Information

Our principal executive offices are located at 115 Fifth Avenue, New York, New York 10003 and our telephone number at that address is (212) 780-2000.

Our website is located at www.multiplan.us, and our investor relations website is located at www.investors.multiplan.us. No information contained on these websites is intended to be included as part of, or incorporated by reference into, this Annual Report on Form 10-K. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and our Proxy Statements, and any amendments to these reports, are available through our investor relations website, free of charge, after we file them with the SEC. We also provide a link to the section of the SEC's website at www.sec.gov that has all of the reports that we file or furnish with the SEC. Investors and others should note that we routinely announce financial and other material information using our investor relations website, SEC filings, press releases, public conference calls and webcasts. We use these channels of distribution to communicate with our investors and members of the public about our company, our services and other items of interest.