Plan Sponsor Guilty of Breach of Fiduciary Duties?

horseSome plan sponsors hire a third party administrator to manage costs. Others hire third party administrators to process claims.

By Molly Mulebriar

A good example of the later is a large Texas school district we know. The district self-funds a medical/Rx plan for their employees, utilizing a third party administrator to process health claims and another third party administrator to process Rx claims.

The district has prohibited sharing of claim data between both claim administrators. This creates a problem if the district expects both administrators to manage claims in addition to processing claims.

An excellent White Paper addresses the importance of information sharing in proper management of health care claims and is a must read for this Texas school district.

“Rx data provide healthcare plan managers with a near real-time view of trends and developments within the population covered by the health plan. Access to accurate, timely data enables plan managers to gain insight into the risk levels to which employer-sponsored health plans are exposed, and facilitates prompt mitigation of risk that not only will reduce costs, but also improve the quality of healthcare delivered to those covered in the plan.”

Although it is a prudent business practice to unbundle plan components in the selection of vendors critical to a well managed health plan, it is beyond stupid to prohibit sharing of clinical data between the Rx and health administrators. Unless, of course, a plan sponsor is simply interested processing claims with no consideration given to managing claims, i.e., managing cost.

Now we hear the district wants to discontinue case management as they feel there is no value nor quantitative return on investment. While they are at it, why don’t they drop UR and pre-cert too? Paying claims will have never been easier! A one man TPA with a PC in a basement is all the district would need.

You can lead a horse to water…………………………


From Mike Dendy

Spot on information. The integration of RX and Medical data is essential in cost management especially when it comes to population management especially for those that need intensified care and disease management. The first alert of a significant medical issue is typically a script after a physician diagnoses the problem. Most of us are not completely capable of understand all of the processes and procedures available to us to help fight off a medical issue and get ourselves well

Medical management is designed to provide support for members on a round the clock basis that no physician is capable of providing for their patient. Finding administrative services that not only share but integrate medical and RX data on a real time basis provides a significant advantage for employers in cost management and member care

Mike Dendy is first and foremost a consultant, visionary, writer and teacher specializing in strategy in the payment integrity space. As a recognized thought leader Mike’s educational yet entertaining style has made him one of the most visible and requested spokespeople helping self insured employers protect their bottom lines. He has been interviewed by national media including the Wall Street Journal, the New York Times, Time Magazine, Bloomberg and Business Insurance, and was awarded the 2014 Professional Achievement Award by Georgia State University Institute of Health Administration.

From Denis Cremin – Thanks for Sharing William. Great points Mike. Not only is it important for cost management but it is essential for managing the members disease.