Legal Disputes in the Healthcare Industry

I couldn’t resist the “who’s suing who” because, yeah, you can’t go wrong with Aretha Franklin references.

Back on the pod we have Chris Deacon, who is going to give us a rundown of the legal goings-on going on right now that impact self-insured employers, carriers, hospitals, and taxing authorities like cities.

Chris breaks down the legal activity into three main categories, and then we discuss some examples of lawsuits in each category. So, here’s the outline of our upcoming conversation:

1. Breach of Fiduciary Line of Cases Against Carriers

a.    Bricklayers vs Anthem Class Action

b.    Mass Laborers vs Blue Cross Blue Shield

c.     Member vs Cigna

2. Carrier vs Hospital (upcoding) and Hospital vs Carrier (underpayment)

a.    United vs TeamHealth

b.    TeamHealth vs United

3. Taxing Authority vs Nonprofit Hospitals

a.    Tower Health line of cases in Pennsylvania

b.    Pittsburgh vs UPMC

This episode itself is a little on the longer side—and I didn’t want to edit too many of Chris’s words of wisdom—so I’m gonna make this a little bit shorter, this intro.

But just one point that I’ll make, and this is about the first category of legal activity wherein self-insured employers mostly try to pass the “who is actually the fiduciary” hot potato to carriers, ASOs (administrative services only), and TPAs (third-party administrators). And the carriers, ASOs, and TPAs are like, “It ain’t us.” Moving forward here, I’m just gonna say carriers as a catchall for carriers, ASOs, and TPAs to save myself a mouthful.

But bottom line on this topic, I just want to underscore something that Chris makes clear later on in the show: Plan sponsors (ie, self-insured employers) are the fiduciary, the sole fiduciary, at least according to the carriers who are getting sued right now. This is the position that you can see them taking in every lawsuit that I have seen. What the carriers say also, as a follow-on, is that if there is any contractual language between the carrier and the employer that violates the CAA (Consolidated Appropriations Act) or any other regulations, it is or was the employer’s responsibility to not sign the contract.

It’s not the carrier’s responsibility to point out that there’s stuff in their own contract that’s in violation for the employer to sign. And this includes contracts that don’t give self-insured employers the right to their own data, which is pretty much a rate critical for any and all CAA compliance.

As Justin Leader wrote the other day in reference to the bricklayer case, “To get to the point of filing the suit, there was a solid 2 years of failed negotiations [for the bricklayers to get their own claims] data.”

Two years trying to get claims data that is necessary for a fiduciary to have from a carrier who is saying essentially, “Good luck with that. You’re the ones that signed our contract.”

Here’s one of Chris Deacon’s latest LinkedIn posts about this topic.

And here’s another one from Jeff Hogan that was interesting.

Also, here’s the link to the earlier episode with Chris (EP342), where we dive into the deep end on the topic of the CAA, which was signed into law at the beginning of 2022 and states that self-insured employers have certain rights and responsibilities based on their role as the fiduciary of their health plan.

For more on the Member vs Cigna case, check out the encore episode with Dawn Cornelis (Encore! EP285).

The show with Vikas Saini, MD, and Judith Garber, MPP (EP394) comes up where we talked about hospitals and their charitable giving.

And lastly, I mention the show with Suhas Gondi, MD, MBA (EP404) about who is on the board of directors of hospitals, big nonprofit hospitals in particular.

My guest in this healthcare podcast, Chris Deacon, is a lawyer by training. She ran the state health plan for the state of New Jersey, which covered about 820,000 public-sector lives. She now has an independent consulting firm, VerSan Consulting.

You can learn more at versanconsulting.com and connect with Chris on LinkedIn. You can also email her at cdeacon@versanconsulting.com.

Chris Deacon has a deep understanding of the fiduciary role health plan administrators hold and should be leveraging in order to drive value for their plan sponsors and members. An attorney by training, Deacon formed VerSan Consulting, LLC, in order to educate and engage employers to be more prudent purchasers of healthcare. From creative procurement methodologies and demanding contracts to population health initiatives and primary care investment, Deacon believes that large employer-sponsored health plans have not only an opportunity but an obligation to drive healthcare transformation that delivers value for the market.

Prior to founding VerSan Consulting, Deacon ran one of the largest health plans in the country for the New Jersey Department of Treasury, which covered over 820,000 public-sector lives, including state employees, teachers, and uniformed professionals. During her tenure, Deacon was credited with helping the state save over $3 billion through a number of initiatives, including enhanced oversight, payment integrity programs, procurement strategy, and strict accountability for the vendors with which the state engaged. Deacon has also served as a deputy attorney general and then special counsel to Governor Christie where she oversaw the Department of Banking and Insurance, Economic Development Authority, and Treasury. She holds a JD from Rutgers Law School and bachelor’s degree in international affairs from The George Washington University.

04:47 What does the current legal landscape look like, and how does it bode for the future?

07:24 “We need to catch the legal framework up with the current reality.”

19:53 How is this first circuit decision affecting who might be found liable in future cases?

21:38 What happened in the Member vs Cigna case?

24:49 Are we heading in the direction of the employer having fiduciary responsibility?

25:47 What’s happening in the Carrier vs Hospital cases?

28:49 Who’s really paying the price for the current business practices being examined in court?

30:00 What’s happened in the Tower cases?

You can learn more at versanconsulting.com and connect with Chris on LinkedIn. You can also email her at cdeacon@versanconsulting.com.

@VerSan_cdeacon discusses current legal affairs in #healthcare on our #healthcarepodcast. #podcast #digitalhealth #hcmkg #healthcarepricing #pricetransparency #healthcarefinance

Recent past interviews:

Click a guest’s name for their latest RHV episode!

Dr Vivek Garg, Lauren Vela, Dale Folwell (Encore! EP249), Eric Gallagher, Dr Suhas Gondi, Dr Rachel Reid, Dr Amy Scanlan, Peter J. Neumann, Stacey Richter (EP400), Dawn Cornelis (Encore! EP285)