Plan sponsors being sued, Personally.

by Ryan Jerico
Senior Consultant, TFG Partners

Truthfully, this is not an “I told you so” situation, but…. look at Dave Chase’s piece in Forbes and well….

For many years TFG Partners has been providing clients with in-depth audits via our 100% methodology. These medical plan claims audits routinely uncover issues of Other Party Liability, Duplicates and Coding issues and Plan Benefit compliance.. While there can be significant savings from correcting these administrative weaknesses, uncovering issues surrounding provider contracts, administrator policies that conflict with the plans’s benefits documents and intent, and shifting numbers in calculations to meet discount/performance guarantees has always been particularly troubling to us as auditors. Most of the time, our clients have shared our concerns and moved forward to have these issues corrected and recover dollars to the plan. We have also seen plan sponsors fail to act on the information presented.

Clients who routinely audit and act see two major results: Recoveries and Improved Processing. While the improvements and recoveries are the usual focus, completing their due diligence and exercising  their fiduciary responsibility is most important. Plans are managing millions of members dollars and those dollars must be protected. Our position for almost 25 years has been that plans and their sponsors have the right to all information they need to complete audits and due diligence. We’ve also said that a sponsor ignoring audit results could potentially be in violation of ERISA.  Unfortunately for some sponsors, lawyers are taking the same stance and filing suits.  As a result, Plan Sponsors, finance and HR professionals,  are being sued personally in suits across the country alleging  mismanagement or lack of management of plans.

If you are a plan sponsor, the pressure is on now more than ever to complete your due diligence and be a responsible fiduciary.  But, we don’t usually say “I told you so”.

Again, please a moment to read  Dave Chase’s piece in the Forbes Pharma & Healthcare section. We are encouraged to see the media climbing on-board and sharing our outrage.