Relentless Health Value Take Two: EP433: The Mystery of the Weekly Claims Wire, With Justin Leader
Jun 5, 2025
In a thought-provoking discussion, Justin Leader, CEO of BenefitsDNA, dives into the murky waters of third-party administrators (TPAs) and their impact on healthcare costs. He sheds light on hidden fees buried within weekly claims wires, including shared savings and pay and chase fees. Justin emphasizes the pressing need for transparency and fiduciary responsibility among self-funded employers. With references to ongoing legal cases and insights from Health Affairs, he urges listeners to scrutinize TPA contracts for a clearer understanding of their true costs.
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Self-Funding Lacks Transparency
- Moving to self-funding doesn't guarantee transparent or accessible claims data.
- Plan sponsors must aggressively seek clarity on fees and services behind weekly charges.
Understand Buried Claims Fees
- Understand the five common fees buried in claims wires: shared savings, prior authorization, prepayment integrity, pay and chase, and adjudication fees.
- Ask contracts for clear definitions and percentages to avoid opaque and excessive charges.
Shared Savings Fees Problematic
- Shared savings fees reward administrators a portion of savings from discount negotiations, sometimes up to 50%, raising fiduciary concerns.
- These fees increase costs and are often based on vendor-reported savings without external validation.