Functional Contracts Review
Are your contracts appropriately structured for your needs and usage?
Navigating Your Contracts Together
Third Party Administrators, Carriers & Pharmacy Benefits Managers
- Typical PBM contracts are known for their complexity, length and detail, numerous definitions and terms that can materially reduce the value of the financial terms and finally a complete lack of clarity on how the PBM earns their money for providing services. It’s critical that an employer hire an objective 3rd party consultant without their own pharmacy coalition and/or use a 3rd party ERISA attorney with PBM contract expertise to negotiate on your behalf.
- Carrier ASA agreements are also vague in terms of responsibility of the parties and their duty to the members to be fiduciaries for the plan. It’s critical that these contracts confirm that the Plan Sponsor has ultimate fiduciary responsibility and as such must have full access to all data as well as hire 3rd parties on its behalf to audit the plan for FWA.
- This requires ERISA expertise and a consultant who understands the importance of how to use the RFP process to secure these best in class terms.
Your Contracted Performance Guarantees
- We evaluate and ensure your contracted performance guarantees are appropriate for all vendors and measured annually.
- This is a more important requirement. For the third party vendors that are typically hired to perform and provide services on specific diseases, or special networks. Too often these are not negotiated nor reviewed annually and there is typically not enough financially at risk for the vendors.
Current Broker/ Consultant Contracts and Behaviors
- Does your current broker/consultant contracts and behaviors follow Health Rosetta™ employer bill of rights?
- If the client had the knowledge and expertise of the best consultants, would they make different decisions than what they make today? How would their behaviors change?
Address Misaligned Incentives in your Current Contracts
Here’s the hard truth: The current system is not designed to treat the individual effectively. Why? Because misaligned incentives drive it. Many players in the healthcare ecosystem profit more when costs go up. In fact, rising costs are often baked into their business models.
This misalignment has created a scenario where nearly one-third of healthcare spending is wasted on fraud, waste, and abuse. These inefficiencies enrich middlemen and other unnecessary stakeholders while leaving employers and employees to foot the bill. Worse yet, 70% of high healthcare costs could have been prevented if root causes were addressed earlier.