As insurance premiums continue to rise nationwide, lawsuits from large, self-insured employers are being filed against health insurers in an effort to access complete medical claims data and fulfill fiduciary duties under federal law.
In a June 30 complaint, Kraft Heinz alleged Aetna has used its role as its third-party plan administrator "to enrich itself to Kraft Heinz's detriment" through undisclosed fees and processing medical and dental claims without human review, therefore violating its fiduciary duties to Kraft. Aetna said it has no comment on the lawsuit.
In December, bricklayer and metal worker unions filed a lawsuit against Elevance Health, alleging the payer does not allow self-insured plans to access their own claims data and charges the plans higher rates than it had negotiated with hospitals. Elevance did not provide comment.
Under the Employee Retirement Income Security Act of 1974, self-insured employers have been required to guarantee they are acting in their employees' financial interest when providing health benefits. Through the Consolidated Appropriations Act of 2021 and price transparency requirements enacted the same year, employers have gained more tools and are under more pressure to fulfill that obligation. If employers do not pursue claims data, employees could sue them for violation of fiduciary duties, Christin Deacon, principal owner at VerSan Consulting, told Becker's.
"I think it would be pretty easy to allege that an employer has breached their fiduciary duty to the employee because they aren't protecting the assets of the plan employees are funding, or at least partially," she said. "It's not just a possibility, there's a strong likelihood."
Ms. Deacon previously served as New Jersey's deputy attorney general and assistant counsel to former Gov. Chris Christie's office. She was also previously assistant director in the department that oversees New Jersey's state employee benefits program.
She said another way employers are being denied access to claims data is through gag clauses placed on brokerage firms that oversee the data. Many large employers use external consulting firms to manage claims data between themselves and their TPA. According to Ms. Deacon, payers often require the middlemen firms to sign nondisclosure agreements, therefore preventing them from sharing claims data with the employer without permission.
Under the CCA of 2021, self-funded employers are required to attest they have not signed a contract that contains gag clauses. In other words, employers must have access to their medical claims data, along with quality and cost information, to guarantee they are fulfilling their fiduciary duty to employees.
"They're battling this out every day in emails and phone calls, with large employers saying, 'I want my data' and [payers] saying, 'You're not getting it,'" she said. "I think we can all surmise that there's a reason why [payers] are fighting so hard not to deliver — they're afraid of what we're going to find."
On July 12, the House Education & Workforce Committee advanced two bills that would strengthen price transparency requirements for commercial health plans and require that health plans' contracts with brokers allow employers to access all de-identified claims and employee encounter data. The legislation would also introduce penalties of up to $10,000 per day for TPAs with a gag clause in their contracts with brokers or employers, and would allow for employers to offer a written explanation if they are unable to access claims data.
Ms. Deacon noted there is a window of time employers have to "get their house in order," but more clarity will be provided around who ultimately owns claims data through the outcomes of the lawsuits against major TPAs, such as the Kraft-Aetna case.
Through those cases, judges will have to determine whether a TPA that negotiates rates or allegedly adds undisclosed fees is a functional fiduciary or is simply operating under a contractual relationship.
"If the answer is that they are a fiduciary, I think every attorney's office in America is going to get a big notice and it will be an industry-shifting moment," Ms. Deacon said. "If it goes the other way, which the First Circuit has ruled in a different case, you likewise will still have an industry-shifting moment."
Ms. Deacon's advice for self-funded employers is to hire outside counsel and begin documenting a fiduciary process that shows there is no violation of obligations to employees.
"The most important piece of this is C-suite engagement," she said. "Start talking to your CFOs and chief risk officers about the real financial risk your company is facing by not doing something."
"We need to spend more time as an industry thinking about why it is taking lawsuits to make these changes," she added. "When the employer purchasers have the power and an insurer says, 'I'm not going to give you your data,' take your business elsewhere. Why isn't that happening?"