Kraft Heinz’s lawsuit against Aetna reveals deeper industry issues as self-funded employers demand access to claims data. The Consolidated Appropriations Act of 2021 grants employers this right, but some third-party administrators are non-compliant. The lawsuits, including those filed by unions and other companies, are just the beginning. Employers are urged to review advisors for conflicts of interest, establish fiduciary committees, and engage in proactive management to avoid legal repercussions and fulfill their responsibilities.
The recent legal action taken by Kraft Heinz against Aetna is just the beginning of a growing trend in the relationship between self-funded employers and their third-party administrators, signaling deeper issues within the industry.
Traditionally, self-funded employers have been responsible for ensuring they offer the best medical benefits to their employees at the most competitive prices. With the passage of the Consolidated Appropriations Act of 2021, employers gained enhanced access to claims data, enabling them to fulfill this fiduciary duty. Aetna’s alleged failure to comply with this legislation lies at the core of the matter.
According to Chris Deacon, founder of VerSan Consulting, the law clearly states that employers cannot engage in agreements with third-party providers or network carriers that restrict their access to de-identified claims data. This legislation recognizes that the data belongs to the employer and prohibits any contracts that limit access to this information. Ultimately, employers are obliged to scrutinize the data to ensure prudent allocation of plan assets.
Unfortunately, some third-party administrators are not complying with these requirements. Kraft Heinz’s lawsuit against Aetna, filed on June 30, highlights this issue. Kraft Heinz claims that it formally requested its medical claims data from Aetna in the mandated format. However, over a year later, Aetna only provided limited and edited data from 2016 through part of 2022. Crucial information such as accurate payment details to providers, prior authorization numbers, coverage dates, and terminations were missing. Kraft Heinz argues that this missing data prevents them from assessing Aetna’s handling of plan funds and payment integrity, asserting their absolute right to access this data.
Deacon emphasizes that the data format requested by Kraft Heinz is standardized and accuses Aetna of withholding full access to hide potential errors made by the insurer.
Importantly, the lawsuit goes beyond data access. Kraft Heinz alleges that Aetna made improper payments to providers, retained undisclosed fees, and engaged in misconduct related to claims processing, leading to financial harm for Kraft Heinz.
Other companies have also resorted to legal action against insurers. Two unions, Bricklayers and Allied Craftworkers Local 1 Fund and Sheet Metal Workers Local 40 Fund, filed a class action complaint against Elevance (formerly Anthem) for denying them access to claims data. The Massachusetts Laborers’ Health and Welfare Fund sued Blue Cross Blue Shield of Massachusetts for similar reasons in April.
These lawsuits foreshadow a larger wave of litigation, warns Cheryl Larson, president, and CEO of Midwest Business Group on Health. Larson raises concerns about the treatment of other employers across the country, emphasizing that insurers selectively provide access to claims data, hindering comprehensive health plan reviews.
To address this issue, employers must conduct thorough reviews of their advisors, including consultants, brokers, third-party administrators (TPAs), and pharmacy benefits managers (PBMs), to uncover any conflicts of interest. Deacon advises employers to recognize that they often rely on biased third-party advice and recommends engaging unconflicted professionals for unbiased guidance.
Additionally, employers should establish fiduciary committees to review health plan spending and contracts, taking a proactive approach to managing their plans’ finances. Failure to take these steps exposes employers to potential lawsuits from employees for failing to meet their fiduciary responsibilities.
Deacon stresses the urgency for employers to initiate uncomfortable conversations, reevaluate their health plans, and take swift action to rectify any shortcomings. Failure to do so will leave employers vulnerable to employee complaints and legal repercussions.
Overall, the Kraft Heinz lawsuit sheds light on a broader industry concern. Employers must seize the opportunity to gain access to their data, assume a more hands-on management style, and fulfill their fiduciary obligations.