A Two-Part Series By Jim Arnold CEO And Founder of finHealth
Prepare to be Scared
We have reviewed many healthcare agreements between large self-insured organizations and the third-party administrators (TPA) who draft these agreements. These large TPA’s (Aetna, Anthem, Blue Cross Blue Shield, CIGNA, UnitedHealthcare) have one thing in common… a cadre of talented legal folks who write the most “customer unfriendly” agreements you can possibly imagine. We recently met with a Chief Procurement Officer for a multinational firm, and recommended he take a close look at his healthcare contract. After he did, the two words he repeatedly used were MIND BOGGLING (despite having looked at thousands of contracts in his career) and SCARY. So, here’s what may be lurking in that otherwise innocent looking 50-page document…
- TPA has various programs for compensating insurance agents, brokers and consultants. If you would like information regarding compensation programs that your agent, broker or consultant is eligible, you may contact your agent, your broker/consultant or your TPA Account Executive (but we sure as heck aren’t going to tell you that without you asking!)
- From time to time, TPA may use aggregated, de-identified plan sponsor data for disease management or other related purposes, which may include sharing this data with other third parties. In those circumstances where TPA is compensated for the use of this data, no compensation is made or due to the plan sponsor for use of this data. Additionally, TPA may refuse to provide the data back to the plan sponsor and/or their vendor if they believe disclosure is not permitted or has not been properly authorized under any applicable law.
- TPA will be eligible to charge “network access” fees back to the plan sponsor, in addition to any “per head” charges collected to compensate the TPA and their broker/consultant. These fees may not be itemized on charges to the plan sponsor, but will be withdrawn from the plan as compensation.
- TPA contracts with pharmaceutical companies to obtain drug formulary rebates directly attributable to the use of certain specialty pharmaceuticals. All such specialty pharmaceutical rebates earned on drugs administered and paid through the member’s medical benefit will be retained by the TPA as compensation for TPA’s efforts in administering the plan.
- TPA may collect payments from drug manufacturers and other organizations that are intended to be used for various “educational” and other related purposes. Consequently, these payments are not to be considered rebates and are not included in the rebates that are shared with eligible self-funded plan sponsors.