Employers have a fiduciary duty to ensure they’re providing their employees with the best medical benefits for the best price. However, they’re often struggling to access their data from their third-party administrators in order to do this. Under the Consolidated Appropriations Act of 2021, employers are supposed to have better access to their claims data and can’t enter into an agreement with a third-party administrator that limits their access.
For one industry expert, this issue is top of mind.
“[Employers] are having more and more accountability placed on them as purchasers, with less and less responsiveness from the industry,” said Elizabeth Mitchell, president and CEO of the Purchaser Business Group on Health, in a recent interview. “So they will be changing how they think about healthcare procurement. Transparency is table stakes. It is an expectation. It’s clarified in the law that they’re entitled to the data, and they will be looking to really just ensure that they are contracting with high-value providers, high-quality, low-cost providers.”
An example of this data struggle is the Kraft Heinz/Aetna case, which went into arbitration in December. Kraft Heinz sued Aetna for cherry-picking data and other reasons. Some employees are also beginning to sue their employers for not meeting their fiduciary responsibilities. This was seen in the Johnson & Johnson case, in which an employee alleged that the company overpaid for prescription drugs.
Mitchell also shared some ways PBGH is addressing these data challenges. The organization is a nonprofit coalition representing about 40 private employers and public entities in the U.S.
“We work really closely with our employer members on how to be an effective fiduciary. … So one of the things that we are doing is a data initiative with our members to use the newly available [Consolidated Appropriations Act] data to match and marry it with their claims data to really identify who are top performing providers in various regions, and doing it at a really granular level,” she said. “Even taking the step of using their data is protective from a fiduciary standpoint, because they are taking big steps to ensure that they are effectively spending the money.”
She added that PBGH is working with its members to ensure they have the right contracting standards in place and have more accountability from their partners.
Looking ahead, Mitchell said she thinks this is just the beginning of the lawsuits against employers for not upholding their fiduciary responsibilities. There are law firms actively seeking for employees to sue to their employers.
“There is every indication that they are searching for employees to file more suits,” she said. “So it is expected. It is definitely getting the attention of a lot of employer C-suites because they are at personal risk, personal liability due to the [Consolidated Appropriations Act] changes, and frankly, they have not been getting the support and advice from their trusted partners like the consultants and brokers and the health plans. I don’t know if they will start suing any of them, but it is definitely going to change the relationship. It has to, because the status quo isn’t being tolerated.”
She’s also seeing more interest in employers implementing direct contracting, in which employers contract directly with a physician or physician group. This can provide cost savings, better outcomes and better access to care.
In addition, PBGH is actively working with Congress on ways “to enable successful fiduciary roles,” Mitchell said.
“There needs to be much more clarity on what we can and should expect from plans and TPAs and all the middlemen like PBMs and some accountability and transparency there,” she argued.
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