Employers could save money with data, consultant says
Insurers contend health claims data is proprietary
A lawsuit filed by an employer health plan against its health insurance administrator may open the door for other employers to demand access to their medical claims data, health-care consultants say.
In a lawsuit filed in US District Court for the Eastern District of Virginia, medical supply logistics company Owens & Minor Inc. said Anthem Health Plans of Virginia Inc., which does business as Anthem Blue Cross and Blue Shield, repeatedly refused to turn over claims data requested since 2021. Owens & Minor’s health plan is self-funded and regulated under the federal Employee Retirement Income Security Act.
The case is the latest filed by employers demanding claims data so that they can perform their fiduciary duties in assessing whether payments for health services are correct and reasonable. Employers are now aided in that effort by the Consolidated Appropriations Act of 2021 (Public Law No. 116-260), which requires employer-sponsored health plans to have access to their own data.
“This case is important to plaintiff and self-funded plans in general,” Owens & Minor said in its complaint. Health plans are entitled to analyze their claims data to determine whether fiduciary duties to operate the plan in the best interest of beneficiaries are being met, and plan administrators shouldn’t interfere with those duties by withholding claims data based on the “erroneous” assertion that the data is the administrator’s “proprietary” and “confidential” information, the suit said.
The suit, filed Feb. 13, cites recent reports of “instances where opportunistic claims administrators have employed illegal or unethical means to obtain windfall profits—at the expense of self-funded plans and taxpayers alike,” including accusations that Anthem affiliates gave incentives to health-care providers to report that Medicare Advantage patients are sicker than they actually are because insurers received more income for patients with more serious documented conditions.
Owens & Minor is asking the court to provide injunctive relief by requiring Anthem to give them access to their data. Owens & Minor is a Fortune 500 company that employs over 17,000 people in 70 countries and is headquartered in Richmond, Va.
Potential for Employer Savings
“We finally have a plan sponsor with the guts to do this,” Tony Sorrentino, a lawyer who is president of Health Plan Fiduciary Compliance LLC, a health-care compliance consulting firm based in Parker, Colo., said in an interview.
“If we go through this fiduciary process, and we understand where our claim dollars are being spent—that there’s waste, there’s abuse, there’s misadjudication of claims—we’re going to be able to save a lot of money,” Sorrentino said.
“Those are the things that are going to take a $10 million group down to an $8 million group” in terms of health-care spending by plans, he said.
The law firm handling the case for Owens & Minor said neither it nor the company would comment on the case on the record. Anthem did not return a request for comment.
Claims Data as Proprietary
Third-party administrators typically claim the information is proprietary and they aren’t willing to share it with the plan sponsor, Amy Gordon, a partner with Winston & Strawn LLP in Chicago, said in an interview.
“It’s sort of a fine line, because if you are self-insuring your coverage,” she said, “you have this financial obligation to pay those claims.”
Transparency rules that took effect in 2022 “were supposed to essentially fix this problem,” Gordon said. The rules, which require health plans to disclose their prices, are intended to provide full transparency into how much the plan is paying for services.
But health-care payments are complicated, with many types of payment arrangements between providers and insurers and administrators, such as reference-based pricing and pay for performance systems, she said.
“Anthem is saying we’ve got all these proprietary arrangements that we don’t want to get out into the public, and yet Owens & Minor is saying we have a fiduciary obligation to our plan participants to know that what we’re paying is fair and reasonable for the services that they are getting,” Gordon said.
In addition to requirements that health plans provide the Centers for Medicare & Medicaid Services with their drug and health-care plan costs, plans are mandated to assess the impact of costs on employee premiums, Alex Jung, founder of Alex Jung Consulting LLC, said in an interview. Jung’s company, based in Chicago, provides consulting for various segments of the health-care industry.
“They cannot properly investigate, or assess their claims, without claims data,” she said. The health insurer’s duty to negotiate the best price for health plans “shouldn’t create a situation where those prices are confidential,” Jung said, “If I’m getting the best price, what exactly are you afraid of showing me?”
Recent transparency rules “made it very clear what data the employer has access to, Chris Deacon, owner and principal of VerSan Consulting LLC, said in an interview. “It’s not a new fiduciary duty. But this fiduciary duty has always been both on the employer and those acting on the employer’s behalf in a fiduciary capacity to engage in oversight.”
“What the CAA did was just make much more clear cut that employers must have access to their data, which obviously makes it much easier to bring a lawsuit,” she said.
Owens & Minor’s lawsuit is the latest filed by employer health plans against insurers—including Anthem, now Elevance Health Inc., and other Blue Cross Blue Shield plans—for failing to share claims data, Deacon said.
The lawsuits have typically been settled out of court with nondisclosure agreements, leaving no public record, she said.
One case winding its way through the courts is Massachusetts Laborers’ Health and Welfare Fund v. Blue Cross Blue Shield of Massachusetts. which was initially dismissed on the grounds that the insurer wasn’t operating as a fiduciary, Deacon said.
In 2022, the Department of Labor filed an amicus brief supporting the Massachusetts Laborers’ Health and Welfare Fund in an appeal to the US Court of Appeals for the First Circuit. The laborers’ fund alleged the Blue Cross plan breached its fiduciary duties by overpricing claims and overpaying providers in violation of plan terms.
To contact the reporter on this story: Sara Hansard in Washington at email@example.com