A health plan’s pricing and claims data plays a crucial role in the design and ongoing maintenance of the health benefits program. Analyzing this data helps the sponsor of a self-insured health plan understand the health care utilization of participants in the plan, and it helps plan sponsors make informed decisions about many aspects of their benefit offerings, ranging from which types of medical items or services to cover to how best to incentivize employee behavior.
However, gaining access to the plan’s pricing and claims data has proven to be difficult for most self-insured plan sponsors. This blog post provides insight into the state of data-sharing between owners of the provider networks and plan sponsors, shared by Capitol Hill insider Chris Condeluci and Benefitfocus’ Vice President of Health Informatics, Traci McGinnis.
Who owns the plan’s data?
Chris: Sponsors of self-insured health plans have always taken the position that they own their plan’s pricing and claims data, and from a legal perspective, they are correct. But even though plan sponsors legally own the plan’s data, that data is primarily generated from a provider network that is rented to the plan sponsor. The renter of the network is either an insurance carrier who builds their own network or an insurance carrier working with a third-party intermediary that rents that network to the intermediary, which then turns around and rents the network to the plan sponsor.
Regardless of how things are structured, the owner of the provider network may take the position that any pricing and health claims data is proprietary information that belongs to the provider network owner.
Why may owners of the provider networks refuse to share the plan’s pricing and claims data with the plan sponsors?
Chris: It is most likely due to competitive reasons. For example, it may be that owners of the provider networks do not want their competitors to somehow find out about their pricing formulas. In addition, the provider network owners may not want the plan sponsor to uncover payment amounts made to a particular provider relative to other providers in a geographic region and/or they may not want the plan sponsor to uncover overpayments or mistaken payments made to providers participating in network.
What are some of the steps plan sponsors have taken to try to gain access to the plan’s pricing and claims?
Chris: In the early 2000s, plan sponsors considered litigating the matter, but they stopped short because they were concerned that a court of law would agree with the provider network owners’ argument that any pricing and claims data associated with a self-insured plan was a protected trade secret. So, plan sponsors turned to the government for help. This led to the Federal government issuing regulations that required the public disclosure of negotiated rates. This also convinced Congress to enact legislation that would allow the plan to access pricing and claims data. However, despite these government actions, gaining access to a complete and accurate set of pricing and claims data continues to be challenging.
Traci: While litigation may not have been a winning strategy years ago due to the reasons outlined above (taking on the 800-pound gorilla of provider networks and fighting for access to their data), we have seen the tide beginning to turn. Thanks to the recent price transparency regulations and Congressional action to require data-sharing, plan sponsors are beginning to feel more educated and empowered to demand their data.
In addition, plan sponsors are starting to feel the weight of their fiduciary responsibilities under the law, most recently evidenced by the lawsuit brought forth by an employee of Johnson & Johnson against her employer as the administrator and fiduciary of the plan, claiming that J&J and the plan’s fiduciaries caused the plan to overpay for covered prescription drugs. In the absence of having access to a complete and accurate set of pricing and claims data, plan sponsors are oftentimes unable to determine if, for example, they were paying over $10,000 for a drug that could have been purchased for $100 on-line or at the pharmacy counter.
The bottom-line is that if you are a plan sponsor, and you don’t know what you’re paying because you don’t have access to your pricing and claims data, you may be at risk.
What’s the current state of play?
Traci: Now that the Administration issued regulations requiring the public disclosure of medical prices, and Congress enacted legislation intended to require owners of the provider networks to share claims data with the plan, it would seem that self-insured health plans and their sponsors can now gain access to the plan’s own pricing and health claims data. In practice, however, some owners of the provider networks continue to refuse to share the pricing and claims data with these plans/sponsors.
Here, owners of the provider networks point to agreements they have with entities other than the group health plan itself as the source for restricting the data. For example, agreements between (1) the provider network owner and (2) third-parties hired to perform plan administration functions or to assist the sponsor in meeting their fiduciary responsibilities often include contractual restrictions. In these cases, the provider network owner contends that these “downstream” agreements are not technically with the group health plan, and thus, the new legal requirement to share pricing and claims data does not apply.
In contrast, plans and their sponsors believe that any agreement between (1) an owner of the provider network and (2) a third-party hired to perform plan administration functions or to assist the plan sponsor in meeting their fiduciary responsibilities is an agreement with the group health plan, and thus, the data-sharing requirement applies.
Chris: We’re seeing that owners and provider networks are resistant to what Congress added to the law at the end of 2020 – a new data-sharing requirement referred to as the Gag Clause Prohibition. The provider network owners may either disagree with what the law says, or they fight with you over which agreements this new data-sharing requirement applies to. Some large networks have narrowly interpreted the Gag Clause Prohibition requirement and they continue to say no.
Unfortunately, the government has yet to catch up despite being asked multiple times to issue clarifying guidance effectuating Congress’s original intent which is: plans and their plan sponsors must be able to access a complete and accurate set of their own data.
Traci: While the stake in the ground placed by the owners of the provider networks has been that the negotiated pricing is proprietary in nature, and therefore, confidential, the fact is that the price eventually is disclosed to the patient when they receive an Explanation of Benefits from their insurer, which shows the insurer’s negotiated rates and the patient’s out-of-pocket costs.
So, the argument could be made that the prices themselves are not confidential since they are disclosed every time a claim is processed, but rather, a matter of timing as to WHEN those prices become public. Because ERISA imposes fiduciary duties as a matter of Federal law, plan sponsors may assert that those obligations should override any contractual clauses between the provider network owner and the plan sponsor or another third-party assisting the plan sponsor that treat this data as being confidential and proprietary.
How can self-insured plans push back?
Chris: It hasn’t been easy for plan sponsors. The best approach is to continue to point to the new Gag Clause Prohibition as the means to accessing the plan’s data. You must also argue that by failing to share claims data with the plan, the owners of the provider networks are effectively forcing the plan sponsor to breach their ERISA fiduciary duties. Just take a look at the J&J lawsuit, along with other employee-participant fiduciary breach lawsuits that have recently been filed in the courts. Furthermore, much can be accomplished through a request to review and amend your current Administrative Services Agreement with the owners of the provider networks and making the above stated arguments during the contract negotiation process.
The first step in pushing back is to know your rights as a plan sponsor, educate yourself and your organization with the protections and obligations you have under ERISA, and then use that to your advantage to demand your data. As a plan sponsor, there are many proven strategies to overcome these roadblocks, and it boils down to (1) Knowing your options, (2) Partnering with consultants and advisors who are working for the PLAN, not for the provider networks/PBMs, and (3) Implementing strategic changes in your benefits design and working with partners that help you administer those benefits so that you can truly change the cost of healthcare for your organization and your plan participants.
Traci: Those of us in this industry cannot sit idly by and wait for change. We all must take part and collectively share our experience, join together, and demand something better. Pay attention to what’s happening with legislation and lend your support – talk to policymakers and tell them why this is important and how it could have a positive financial impact for plan sponsors and including your employees.
The information provided does not, and is not intended to, constitute legal advice; instead, all information and content herein is provided for general informational purposes only and may not constitute the most up-to-date legal or other information. Benefitfocus does not act in a fiduciary capacity in providing products or services; any such fiduciary capacity is explicitly disclaimed. This summary is provided by a consultant to Benefitfocus.com, Inc., and any opinions expressed within do not necessarily reflect those of Benefitfocus.com, Inc. or its affiliates and are not intended to provide specific advice or recommendations for any plan or individual.
