Can A TPA Force The Sale Of A Tie-In Product Under ERISA?

Can a third party administrator force a client ,who is subject to ERISA , to purchase a product as a condition to administer claims or renew an existing Administrative Services Agreement, a product for which the TPA receives renumeration from or has ownership interest?

Some businesses  force the sale of a tie-in product in order for the consumer to buy the main product. For instance, a car maker may force a buyer to have the battery or other product from a company they own or influence, and thus get an additional profit center.

Under ERISA, that kind of tie-in is a whole category of “prohibited transaction” known as “self-dealing”, and can land you in jail. It is all for the protection of plan participants and to be sure that plan assets are used in the most prudent way in every transaction.

If a TPA, for example,  requires the use of an audit firm from which they receive a kickback instead of another audit firm equally qualified yet less expensive,  would this be an ERISA violation?

A self funded health plan is composed of many moving parts.  Unbundling services to get the best value is unquestionably an important duty required of fiduciaries.  In reality, however, many self funded employers rely on their TPA to subcontract services while never questioning cost components individually to any significant degree.

 

Walgreens VS Express Scripts

Mon, January 16, 2012 2:59:40 PM

 
A Competitive Advantage for You with Walgreens Pharmacies
From:
“Joe Terrion, Walgreens Chief Client Officer” <clientcommunications@walgreens.com>

Add to Contacts

To: Riskmanager <riskmanager@sbcglobal.net> 

 
 

Attention Health Insurance Brokers:

We’d like to reinforce a competitive advantage for you when selling against health plans affiliated with Express Scripts. We had previously communicated that as of January 1, 2012, Walgreens is not part of the pharmacy network of Express Scripts. This means select health plans with Express Scripts as the plan administrator will not have in-network access to Walgreens in 2012, and face a competitive disadvantage.

Several plans that use Express Scripts are impacted, including the following plans: 

  • WellPoint – also doing business as UniCare and Anthem (national)
  • Scan Health (Arizona)
  • Blue Cross Blue Shield of Louisiana
  • Blue Cross Blue Shield of Idaho
  • UCare (Minnesota), and others.

The number of lives impacted is significant. WellPoint/Anthem Blue Cross Blue Shield alone has over 10 million lives in this segment.  

Opportunity for selling Small Group plans with an integrated pharmacy benefit can ensure your clients access to Walgreens in 2012.  Pharmacy is one of the most frequently accessed benefits  by members.   Never before have the networks been this dramatically differentiated – this is a new and unprecedented selling point.  Many plans are competitively-priced on the medical side – so a pharmacy network access issue can be a source of true differentiation. Patients value choice of pharmacy, and the ability to choose Walgreens – for continuity of care, and late hours access in addition to convenience.  To ensure continued access to Walgreens, many employers are willing to change to a comparably priced plan that offers access to a broad network of pharmacies including Walgreens. Please see below for a few helpful talking points to educate clients on the situation.

Walgreens is getting the word out, too

Walgreens has put together a comprehensive education program to reach patients who may already be expressing concerns to their employers.  You can help by educating your clients and helping them select an appropriate plan for their needs.  Additional information is available at www.IChooseWalgreens.com.

Sincerely,

Joe Terrion
Walgreens Chief Client Officer

Talking points for Health Insurance Brokers: 

Education on the Walgreens – Express Scripts situation

What is happening

  • For 2012, pharmacy access is an important consideration for small group insurance plans that include a pharmacy benefit.
  • As of January 1, 2012, Walgreens Pharmacy, America’s largest pharmacy chain, is not part of the Express Scripts pharmacy network.  Never before have patients and employers had to consider such major differences in pharmacy networks.
  • This will impact select health plans which rely on Express Scripts’ pharmacy network, including plans of WellPoint, Scan Health, HealthFirst, UCare, Blue Cross Blue Shield of Louisiana, and others.  

What members should know

  • You can easily switch to competitively priced health plans that provide access to a broad network of pharmacies, including Walgreens.   

Why members like you value Walgreens

  • Each year, Walgreens fills prescriptions for roughly 1 in 3 Americans who use a retail pharmacy
  • Walgreens has the most stores (nearly 8,000), and more 24 hour stores and drive thru locations than any other retail pharmacy
  • We have a community pharmacy within 3 miles of almost two-thirds of all Americans
  • In some areas, beneficiaries may have to drive several miles to the nearest alternative pharmacy
  • We know how important it is to keep the continuity of care that is vital to the beneficiary’s health 

Request For Proposals: Walmart Seeking Partner/s – Wants To Be The Nation’s Biggest Primary Care Provider

On Tuesday, Walmart spokeswoman Tara Raddohl confirmed the proposal but declined to elaborate on specifics, calling it simply an effort to determine “strategic next steps.” The 14-page request asks firms to spell out their expertise in a wide variety of areas, including managing and monitoring patients with chronic, costly health conditions. 

Continue reading Request For Proposals: Walmart Seeking Partner/s – Wants To Be The Nation’s Biggest Primary Care Provider