Bill, can you hide $150,000 in commissions in the TPA admin fees?……………………
Recently I had a conversation with two brokers both sharing commissions on a 300 life fully-insured case they placed with Cigna. The owner of the company was interested in looking at a self-funded plan and Reference Based Pricing strategies.
I explained how self-funding works (they were clueless) and went into the details of the history of Reference Based Pricing and the practical implications it has on health care access and cost.
“Will you help us develope a proposal?” said one. “And can we make the same commissions we are making now with Cigna?” asked the other.
“Of course that’s possible. We simply add in your commissions to the billing statement. It will be clearly shown as a line item on the group’s monthly invoice. How much do you need” I asked.
“We’re making $150,000 now, $75,000 each, but the owner doesn’t know it” they stammered. “Can you simply load in $150,000 and hide it in the TPA administration fee” they whispered.
I’m guessing the new disclosure rules haven’t made the news in the Houston market yet?
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Health Plan Fiduciaries Must Solicit Information from Brokers and Consultants
“Plan fiduciaries should consider taking the following actions:
[1] Identifying and assigning internal responsibility for soliciting and evaluating required information from brokers and consultants.
[2] Introducing contractual obligations on brokers and consultants to provide the required information …
[3] Developing the means to evaluate the information received …
[4] Assessing whether the compensation is, in fact, reasonable[.]” MORE >>
