This legal trend is not something that Christin Deacon, principal owner at VerSan Consulting, thinks is going away soon.
Ms. Deacon previously served as New Jersey’s deputy attorney general and special assistant counsel to former New Jersey Gov. Chris Christie.
“We’ve gotten to a point for employers where the cost of health coverage for their employees has gotten so high and grown sort of drastically over the last few years that they’ve had to pay attention to the bottom line, or at least the employers that are bringing these suits,” Ms. Deacon told Becker’s. “When they start to dig in, they find that they don’t have access to data, which would let them know, ‘Where is my money going?'”
Then, when employers are told that they cannot access their claims data, Ms. Deacon said alarm bells might go off and lawsuits could follow.
But employers can’t always point the finger at the third-party administrators. They have to look at themselves, too, she said.
For example, if an employer signed a bad contract that allowed egregious behavior to go on for a long period of time, the TPA could turn around and ask why the employer hasn’t said anything until now.
“I think that definitely plays into the fear factor of employers not being more aggressive,” Ms. Deacon said. “There’s plenty out there that are going to get on the bandwagon of being more aggressive with their carriers. Nobody wants to be the first, but everybody wants to be a fast follower.”
For third-party administrator leaders looking to avoid these legal battles, Ms. Deacon said it starts with asking your vendor partners the right, and sometimes uncomfortable, questions.
“I think the first step is get a handle on all of your existing contracts and relationships and ask for your claims data. Document everything you’re doing to try to be a good fiduciary to the plan,” Ms. Deacon said. “Get your contracts, read your contracts, get your data and put processes in place that are going to help you protect yourself again from that fiduciary liability.”
While the brunt of this kind of legal work can often fall on health plan chief human resource officers, it’s important for them to also tap additional expertise to help handle the load of legal and financial background work.
“They [CHROs] have the weight of the world on their shoulders, it’s not fair to them to expect them to play lawyer, to play accountant, to play claims coder,” Ms. Deacon said. “They need to be supported with that expertise.”
