Real World, Battle Tested Solutions to Health Care with Marshall Allen

Welcome to Raising the Bar, the podcast that pulls back the curtain on the country's most successful leaders and how they elevate their business and their teams. Please welcome our host, Alison DePauli.

Hello, everybody.

Welcome.

And we are going to give it just a minute and we're going to get started. But while we're giving it that minute, I am going to just go through a little bit of housekeeping. I am going to try to follow the chat, but I do this all the time, so bear with me. If I don't get to your question and you can drop questions in the chat or the Q and A, we will talk about questions at the end. So please don't worry about that. I'll clean them up. When we get towards the end, we will be sending out books. We will send you an email and get your address so that we know.

Where to send the books.

And I am very excited to say that all of the books arrived Monday. So somebody walked into my office and.

Said, did you see all the love packages you have?

And there were huge stacks of books. So I'm very excited myself and I'm excited to get them out of my office. And thank you everybody for coming. We're going to have a great conversation with Marshall today. A bunch of you on this webinar are familiar, I know, and you're going to learn a whole lot about Marshall and what he does and why he has insurance groupies and about a few other people that you need to know about. I think you'll get a lot of value from the book. And if you are an employer on here, I think you will learn a whole host of things. And I hope that you are as appalled as we in this industry are appalled. So with that, it's 201 and we are going to get started. Marshall, thank you so much for doing this with me today. I want to take a minute just to let people know who you are. I know most people know that you were an author with ProPublica, writer for ProPublica. You also have a 2011 Harvard Kennedy School Goldsmith Prize for investigative reporting. And you are a now twice nominated Pulitzer prize writer with ProPublica and the best selling author of a book that has taken off, I think, even beyond your wildest dreams, Never pay the first bill. Thank you for coming today. Tell us how you ended up reporting about healthcare.

Thank you, Alison, for inviting me. Thank you so much for putting this together and I appreciate everybody joining us. I know you're busy and so I appreciate you being here. I'm Excited to talk to you all. So I'm an accidental healthcare reporter. I mean, I never intended to cover healthcare. In fact, when I started at the Las Vegas Sun, I had been a journalist for five years. And the sun is a small family owned newspaper in Las Vegas. My editor takes me out to lunch one day and says, we want you to cover healthcare. And my first words were, I can't imagine anything more boring than covering healthcare. And I was completely wrong. I was totally ignorant about the industry. But what I do well, I think is I listen to people and then I can take advice and see an opportunity. And so I told my editor, I said, well, look, I know nothing about healthcare, but let me give it a try. And as soon as I started my very first stories, I could see right away that this topic is so important to readers because you're dealing with people's health, first of all, and their money. And there's not much that people care more about than their health and their money. And so every story I've done that was in 2006, every story I've done ever since then has been focused on the individual patient and how they navigate through the healthcare system. So, and they've been mostly investigative in nature because if you're gonna look at this system from the point of view of the patient, inevitably you're gonna be running in opposition against a lot of the big healthcare power players who frankly are taking advantage of patients and taking advantage of them financially. And then I've also done tons of stories about patient safety and quality of care issues. I've spent years investigating those issues. And so I started looking at it through the lens of the patients who navigate the system. And I found injustice after injustice that was astonishing sometimes in their absurdity, just how crazy the over billing can be, how sloppy the billing can be, how much over treatment takes place. I mean, it's a target rich environment for an investigative reporter. And so I took all of this knowledge and what led to the book is I would get all these phone calls and emails because you start doing these stories and then patients start to find you and they start emailing you because they're so desperate for help. And so I had gotten so many phone calls and emails and I had done so many in depth stories where I looked at people's records, I looked at their medical bills, I helped, I ran all this stuff by experts. I learned kind of how crazy, how this crazy system works. And so I was like, well, I need to, you know, you can like feed a person a fish or you can teach them to fish. And there aren't enough journalists in America to do all these stories. And so I wanted to empower and equip individual patients to fight the system and win. And so the subtitle of my book is called Never Pay the First Bill and Other Ways to Fight the Healthcare System and Win the and winning is really the most important part. And one thing I learned. So there's eight chapters in the book for employees and there's three chapters for employers. And Alison, I know you know this, but one of the astonishing things that I learned as I was doing these investigative stories specifically about health insurance and the way we pay for employer sponsored health benefits, that the costs don't have to be this high. There are employers right now who are working with advisors like yourself who are navigating the system in a different way. It might not be the same black box kind of health insurance product that's put out by one of the big insurance plans, but it's still, it's actually better. It's better benefits at a lower price. And so that's something I emphasize in the employer section of the book and in the earlier section. The book is really focused on working Americans and I'm showing people how they themselves and their employers can save a lot of money while delivering better benefits.

I love that you say that employers are the sleeping giants of healthcare reform. Tell me why you said that.

Well, I think no one's ever actually tried to engage the employers and the employees so that they could start to assert themselves. I think we've always wished that our policymakers would come up with a solution that'll fix this problem for us. Or we've trusted the health care industry when they talk about value based payment. Or we're going to look at this issue, or we're going to look at that issue as if it's going to lower health care costs. The industry has no incentive to take less money from us. And politicians have had decades on both sides of the aisle. I mean, I'm not being political here, I'm just saying we can look at over 20 or 30 years now and we can see ongoing ridiculous increases in prices that are unjustified. And so we need to stop looking for someone else to solve this problem. And I think the employers and the employees have not even been engaged yet. They're just starting. You're seeing some early adopters, but you tell me, I mean, how many employers would you say are really being assertive with their benefits design in a way that's improving the care While saving money.

So I am incredibly fortunate to have some, some employers who have said, okay.

Hold up, we're going to fix this.

One, we can't pay this, and two, this is not working for our people. And they run it at kind of different speeds. You know, some are a little further along than others and the cultures are all different. And I think that that is an important piece that we don't talk about a lot. You know, different cultures have different needs and they need to have different conversations.

You mean the culture of the companies?

Culture of the company.

And I think that's important. You know, I have a client who we put in a reference based pricing plan which some of you may know or not. And that is not for everybody. But for some employers it's great. But it does have its hiccups. And we recently had an issue where an employee had some balance bills and they were about $8,500, which in the grand scheme of things is not that much. But if you make 40 or $45,000.

A year, that will bankrupt you.

And I went to the employer and I said, okay, this is what we've got. This is what we're going to do about it. I'm not sure that we're going to, we'll wipe out some of this. I'm not sure we're going to get rid of 100% of this. I'm going to come back to you if there's anything left and I want you to write a check. And he looked at me and went, okay. Not employers are like that. Not all employers have the means to do that. There are other employers who use a reference based pricing and oh, we can't do that.

And they may not be able to. And that's okay.

I think you need a more nuanced conversation. What we and a number of my mastermind partners are on the call today. We don't set it and forget it. We work all year to make sure that things happen. But I gotta tell you, it's kind of fun.

Yeah.

And helpful and useful to people. And I think that's the most, I.

Think it's also satisfying because I've talked to, I say in my book, when.

You talk to the employers who have.

Made this change, they're very like almost like evangelistic about it. You know, it's great to talk to these folks because they've realized, oh, all these years I was doing things their traditional way. Well, the system is set up for you to do things the traditional way so they can keep taking more of your money than they deserve to be taking. And so you do have to swim upstream against the incentives or the way that the system is trying to push you. And so far, you know, when I say sleeping giant, a lot of employers are asleep. And I actually asked a lot of advisors when I wrote the book, when I was writing it, I said how hard should I be on employers in this book? Because a lot of it I'm looking at from the perspective of employees. And so I'm looking at these rising costs, the deductibles are going so high that people. There was a study that just came out last week in the Journal of the American Medical association that said that one in five Americans now has medical debt in collections. And the overall burden for all these Americans with medical debt in collections, it's about $140 billion that they're right now holding. And so this is crush the working Americans. Right. So when I talked to advisors about this, they said, well, you should be hard. I mean, yeah, you want to be hard on the employers. However, the employers are also victims here. Right. They're funding these higher and higher costs. And I think the secret thing that hasn't happened yet is they haven't equipped their employees to navigate the pitfalls of the system. And so that's what I try and do with my book. And then they also need to have the courage, and I think it takes courage on their part to, to try something different and it feels very risky to them. But even these reference based pricing plans, yeah, you might get hit with some balance bills, but overall your costs are so much lower to begin with that you can afford to pay a few balanced bills here and there. Right?

Yeah.

So I'm trying to persuade, I think in my book I was actually pretty fair to the employers. I didn't beat them up or anything like that. But I am, but I am trying to persuade them to try like please have the courage to do this and employees to have the courage because the employees need to change their mindset as well. Right?

They do. And I think one of the most important things that you said in the book, among many important things, is that.

Health insurance is employee compensation.

And I think many people look at the frame kind of as well. Yes, that's part of my compensation. So I'm going to use it not realize that when it's abused and there's over delivery of care and overspending and fraudulent, all the fraudulent things that happen, that, that, that those dollars, your salary increase is going to fund that and it's not coming to an employee's pocket. And if there's a concern.

I think, I think that's one of the game changing things that if an employee understands. And so in I think it's my first chapter of the book, I have what I call the five reasons why. The five hidden reasons why we have to fight back. And reason number one is what you're hitting on. We need to stop saying someone else pays for health care. Right? Because even in an employer sponsored plan, let's say I'm an employee and I've met my deductible. So in my mind I go, well, great, the health plan is paying everything. It doesn't matter what price I pay. It doesn't matter whether I need the care or not. Now you know, you might have some coinsurance or a co payment, but it's a free for all, right? If you've met your deductible. Well, nobody is saying you shouldn't get care that you actually need. But what employees don't understand is that your compensation includes your wages, your health benefits, your retirement benefits, you know, paid time off. This makes up your benefits package and it's funded by your employer. So we're thankful that employers are funding all this money for our healthcare benefits. But it's part of the employees compensation package. And so what I'm trying to help employees see is like all this money that's in this pool of your compensation for you and your colleagues if it gets wasted on overpriced, unnecessary health care. And by the way, you know how that can get racked up by the thousands of dollars. Like I talked to a guy, Kevin Vincent, in Amarillo, Texas. He needed two MRIs. He got quotes for him because he had a high deductible health plan, $10,000 deductible. He got referred to a hospital imaging center. And anybody who's in the industry knows that, that hospitals are the most expensive places to get an MRI or a CT scan. Most employees don't know that. I mean, you wouldn't know that. You just go to the place you're referred to, right? Well, he got referred to the hospital. The initial price was $11,000 if he ran it through his insurance and 9,000 if he paid cash. Well, he ended up getting referred through a company called Green Imaging to an independent MRI center which was about a half a mile away from the hospital. And he paid $900 for those two MRIs. So he saved more than $8,000. Well, so your health plan saving $8,000. Now in his case, he paid cash so he saved it himself. But if you. Let's say he would have met his deductible, he might have been like, I don't care if it cost 11 grand. I mean, I met my deductible. Well, man, you got to realize you just gave an $8,000 bonus to that hospital MRI center, and you took that money out of your precious money that's devoted to your compensation. So the next year, when your employer goes to give you a raise, they're going to be like, wow, we Wish we had $8,000 extra to give people like Kevin a raise. But it's all been spent. It's all been given to the health care system. So employees and employers need to team up together to navigate these pitfalls, take them on together, and then overcome them. Which it is possible to do.

Yes, it is.

I have a client that gave me the best compliment I think I've ever had and didn't give me any warning. So I about passed out and said he was introducing me to somebody. And he said, well, she's helped us. And for the first time in I don't know how many years, we've been able to give a merit increase and not take it back.

And people notice.

Wow.

And, you know, generally merit increases are not huge.

But you kept it, right?

It was your money, and you kept it. And I think those are the kind of things that employers who contain their health care costs can do lots of other things as well. Let's talk about Marilyn Bartlett. I am a ridiculous fan girl of her, and she is.

I'm a fan, too.

To put up with being swamped, swarmed by insurance agents, wherever she is. You devote quite a section of your book to her. For those of you that don't know who she is, she ran the state of Montana health plan, watched it almost go over a cliff, and brought it back at age 67. And she might be 92 pounds soaking wet. The nicest, kindest woman you have ever encountered, unless you mess with her health plan.

She is a tough, tough cookie. And the thing I. When I wrote about Maryland, each chapter of my book, I try and highlight what I'm kind of calling these guides, right? The people who have navigated the system, and they fought back and they've won, and then they've developed tactics that the rest of us can follow. So the chapter I do about Marilyn Bartlett is really a blueprint for what other employers can do, and it shows by telling her story what other employers could also do and the types of questions that they need to ask. So when Maryland took over the health plan, it was failing and it was predicted to be insolvent within just a couple of years. And so that created the environment, which I think, by the way, is the environment a lot of us are in now where there's a certain amount of desperation and that creates a willingness to try something maybe different or something more provocative. And so Marilyn, when she got hired, she, she gave me the PowerPoint that she delivered when she got hired. And she gave this presentation where she said, here's what I think we should do. We're going to go on a reference, we're going to analyze our spending compared to the Medicare as a benchmark, which I recommend in my book that people do, because you can get Medicare prices at different hospitals and different doctors. That's public information. And so you can compare what you're paying to the Medicare price. And when she did that with her health plan, she found that there's, you know, Montana is a small state, so there were 13 big hospitals in the state. They were charging her anywhere from say 200 or so percent of Medicare up to sometimes 800% of Medicare, depending on the service and depending on the hospital. And so she realized, I need to get these hospitals down into a range that I can afford. And she just said, I'm going to set the price. And that's what you're doing with these reference based pricing plans, right? Reference based pricing is on the spectrum, a much more aggressive approach to take. Right where you say, and I think I said the buyer sets the price. Right. That's really the argument here. We are the buyer, we're going to set the price. And when we set it, you know, I don't remember the percentage of Medicare she set it at, but it was a generous percentage of Medicare, 180% of Medicare, 200% of Medicare. I don't remember the specifics, but it's something like that. So it's not like less than Medicare or we're just going to pay you the Medicare rate. By the way, they're taking the Medicare rate. So then she had to go to all the hospitals because she had employees for the state all over the state. She had to go to those hospitals and she had to negotiate with them. And some hospitals, I like to also point out there's a spectrum, right, of price variation. Some of the lower priced hospitals actually got a raise under her reference based pricing plan. And then the higher priced hospitals, of course, had to take a pay cut. But I think what we need to realize with that price variation Even if we don't put in a reference based pricing plan, we don't get more for our money in most cases in health care by paying more. It's not like buying a luxury automobile or a mansion in a beautiful neighborhood where if you pay 100,000, you're going to get something much better for say a knee replacement than if you pay 20,000. Which by the way, for Marilyn, when she looked at her claims data, some of these places were charging and expecting 100 grand for a knee replacement. Others were, it was 20. I just need to say that again.

I just paid for two. I have a client that had two done at the same time and we negotiated that down to 21,000 without any argument. Hospital, not an argument.

That's incredible. That's incredible. So I bet that hospital, I mean, I wouldn't know, but you know, I bet they're getting five times that in some cases for two knee replacements.

Right.

Because the variation is so huge. Now, if you know the variation is high, what we need to start doing is just saying, I prefer to have the lower price, please, I don't want to pay five times more than someone else is paying for the same thing. And so in the book I try and show this price variation exists everywhere. Whether it's drugs or imaging tests or lab tests or any type of procedure, the price variation is huge. So we just have to identify quality providers that deliver the value for us at a reasonable price and then shun the ones who are overpricing us and price gouging us.

Right.

There is real data that you can access.

Nobody makes it easy to access, but it is accessible.

That will tell you who a high quality provider is with evidence based medicine standards. And I think that is the most important piece. And when you follow that low cost is a natural byproduct and it may not be the lowest cost. And I don't think we need to have the lowest cost. I mean, we're talking.

It doesn't have to be. No.

But a fair.

You just want to make sure. Yeah, you just want to make sure it's fair. Right. And that's where even the title of my book, I mean, never pay the first bill. I'm not saying never pay your bills, but the principle is never pay the first bill until you have verified that it's both accurate and fairly priced. And you do that by getting an itemized medical bill. Every employee, when they get a hospital bill, should call them up and say, hey, you didn't itemize this for me. You need to give me A list of all the charges, just like we would get anytime we go out to a restaurant or go to the grocery store. We need to have it itemized so we can make sure it's accurate. And then if you get the billing codes, you can look up those codes and you can see if those prices are fair. And you can check now on hospital websites because the federal government now requires hospitals to post their prices. Or you can go another place you can get a good estimate is fairhealthconsumer.org that's a website anybody can go to. You can put in the description. Let's say it's a colonoscopy. Yeah, it's all in the book.

Right.

And so people can price it and then they can see if it's fair. And if it's fair and accurate, well then pay the bill. And if it's not, well then that's when you can test it. With Maryland, she also looked at her pbm, you know, her pharmacy benefit manager. The two biggest buckets where she found savings were with the hospital pricing, where she got them to agree to a reference based model. And then it was the pharmacy benefits. And you know, drug prices have skyrocketed. And I'm always amazed by these schemes that these companies come up with to take our money. And one of the most outrageous ones that's becoming uncovered more and more is this thing called sports spread pricing. And spread pricing, it's a little confusing, but it's basically just kind of simple where a pharmacy benefit manager, which is like the insurance company that manages the pharmacy benefits, gets the money from the drug manufacturer and fills the prescription at one price, let's say it's $10 to fill a prescription. Well then they tell the employer sponsored health plan that it costs $20 or $50, and then they quite simply take the $20 from the employer sponsored health plan and pay the $10 to the pharmacy and that's the spread pricing. And there have been more and more studies now being done, these audits in different states, mostly of Medicaid plans, where they are finding the amount of money being lost to spread pricing. In the state of Ohio, they did an audit a couple years ago, it was more than $200 million lost to spread pricing just for generic drugs alone in the Medicaid plan. And this spread pricing is baked into all these employer sponsored health plans. And so if you're an employer and you're sponsoring benefits and you're not looking at your PBM contract, you got to start digging into that stuff. And this is what Marilyn did, right? She read the fine print in these contracts. And I actually, it's been really satisfying for me. As the book comes out, I have a friend who's in a position of leadership for his own company. This friend of mine got ahold of the book and he's now started asking questions of his broker and of his insurance company about spread pricing. And he told them, I want to know how much money is being lost to spread pricing in my healthcare plan. And, you know, you can maybe guess what their answer was. Alison, what do you think their answer was?

No, none of your business.

Yes, that's exactly right. They told him, we're not required to tell you and we're not going to tell you. So hold on now. The employer is the one paying for this, and yet when you say, wait, I'm funding this. I want to know how much is being paid in spread pricing. They say there is spread pricing, but we're not required to tell you and we're not going to tell you. What does that say? Right. That's crazy. And so I talk about in the book how in America we say the customer is always right, but you aren't the actual customer. In healthcare, they don't treat us as the actual customer. And that's a perfect example.

Patients are not, in my opinion, patients are not the actual customer.

The networks and the.

They're not always hospital systems, but facility systems.

They are the customer of each other.

And that's where their interest lies. An employer is a secondary kind of customer, and I think so.

Now, though, to tie a bundle on that, you know, or a bow on that, Maryland switched to a PBM that did not use spread pricing. Boom, done. There are PBMs out there who don't operate that way. And so she switched to one of those and she saved millions of dollars a year. And so basically, Maryland turned this whole health plan around. But tell me about the ones that don't do spread pricing.

So there are about half a dozen.

That don't do spread.

There are about half a dozen that.

I am aware of that don't do spread pricing. I'm sure there's a few others that I don't know, and I don't know everybody.

There are about half a dozen that.

I'm aware of that don't do spread pricing.

And they put in their contract.

So you have to go back to the contract, and you always have to go back to the contract that they will allow you to audit down to what the pharmacy is paid. So they'll let you look at the 835 files and they indicate that they will pass all third party revenue back to you. And I have a friend that has worked in the PD industry for a long time and when he does presentation he says, you want your rebates back?

No problem.

I got five other buckets. So there's. What do you mean places? Five other buckets where they sort of shoot money back and forth.

So you have to be able to.

Audit down to what the pharmacy was paid or you do not know. And you cannot calculate your rebates. And you should be right. Did not be getting a rebate credit. That is right.

So that, so that's super interesting.

So I don't even know about these five other buckets.

Right.

I mean some of this stuff is just beginning.

Yeah, that'll be the next one.

Right.

But this stuff is just beginning to be revealed. And you're hitting on another thing, Allison, that's really important that I say in one of my whole chapters for employers.

Is that if employers don't have a.

Benefits advisor that is asking these questions.

For them because many advisors are being funded by the PBMs, right? They're being funded by the big health insurance companies, the traditional insurance broker arrangement. They're really being influenced by the money that they're taking from the industry while they do advising for the employers. And that's a conflict of interest, right. That at least you need to have that all that income disclosed so that you know where it's coming from. And that's sort of what started with my friend who is in this position of responsibility with his organization. He started asking his broker, what are all your sources of income? And that's where the spread pricing thing came up. And you know, so this is, this is stuff that's just beginning to be untangled, right.

And there were some pretty significant regulations, executive orders that came out in the fourth quarter and in the early part of January, which is fairly typical of all administrations really requiring employers, not health plan carriers, not brokers, but employers to understand all the sources of revenue in and between their vendors. And the penalties for not following that are pretty substantial. They if you do not ask and.

Receive this information, then you have committed.

An ERISA prohibited transaction. And ERISA prohibited transactions are.

There is a civil penalty and there is an excise tax and you have no idea how big that can be.

And like most things governmental related penalty letters are going to come 48, 24.

36 months later and then you're going.

To be like, wait, what, what I don't know what, what. Don't be that, don't be that person.

That's right.

What is going on?

And ask. You are. You are obligated to ask and all of your vendors are obligated to provide that information to you, how much they're paid and what they do for that fee. And people need to make.

And I don't want to demonize anybody.

Here, there are plenty of hospital systems that offer fair prices for care and take good, good care of people.

That's right.

You know, there's no one demon here.

There's a system that is not built for patients.

That's right. And I think that's. That is an important thing to emphasize. You know, like as an investigative reporter, my tendency would be to highlight the bad actors. There are just as many who are on the fair side and what we need to do as employers and employees, we need to go to the ones that give us the fair price, the price up front without the shenanigans, and then reward them with our business. And that's why we have so much power, and that's power that we haven't yet utilized. Employers and employees fund most of the healthcare system. We collectively are the biggest payers. We're bigger than Medicare. We're bigger than Medicaid. There's 155 million Americans getting their employee benefits through their employer. There's another 30 million or so that are uninsured. So we're steering the business for about 185 million Americans. Imagine if we were to assert ourselves. And that's really what I'm trying to call for people to do. Let's not be passive. Let's get engaged. Let's not be ignorant. Let's be educated and empowered. And then let's not back off. Right? They're going to trust me. They're going to squeal when we poke them. Right? Just like my friend poked his, poked his, his, his insurance company and his PBM and his broker and said, I want to know what's going on with spread pricing. Well, they said, we're not going to tell you. They're not going to just always roll over. But then we need to say, okay, if you won't tell me, I'm going to give my business to someone who will. That's not a trusting relationship. That's you keeping.

Yeah, it is. And so that's. And so I think the thing is, is that we can win when we do this. And that's what I'm trying to encourage people to do.

I want to talk for a second.

About our wonderful Covid experience. And, you know, I mean, this is a new thing. Nobody knows what's going on. And you have a very interesting story in your book about a doctor who.

Got a COVID test and about passed out and decided he wasn't going to take that. But I have a similar situation in south Texas with an employer that had five people at a particular location go to the same urgent care facility for a COVID test.

And they went for their COVID test. They followed their own.

Fortunately, nobody had Covid.

They went back to work, everything was fine. And when they were doing their claim review, they saw these five charges for these five people that were all just under $5,000.

So they were like, what?

They dug into that a little bit more COVID testing and blah, blah, blah, blah, blah, blah. All kinds of things that were not authorized, that were not authorized by the patient and the patient was not aware of. They went so far as to call.

Each of the patients and say, did.

You have all of these things? And every one of them said, I went for a COVID test. And I had a COVID test this morning. It was $120. So it's not cheap, but it's not $5,000. And they did nothing. They just. They had already paid the bill. And they were like, well, okay, we'll just tell people not to go there. To have a COVID test, was this.

A fully insured plan or was this a self funded plan?

This was a self care, an aso, what we call ASO carrier, self funded. And it had already been. And they just went, well, okay, you.

Don'T have to do that.

And you have a. Dr. Sussman did not do that. And got mighty irritated.

Yeah, in his case. So this is, again, I feel like the absurdities stack on top of the absurdities with a lot of the stories that journalists write. But I think this might be. I think I may have documented with this one the highest paid COVID test. So Dr. Zachary Sussman worked at one of these freestanding emergency rooms in Texas. He was in Austin. He actually was a contractor who set up their Covid antibody testing. So he knew it only cost about $8 to run these antibody tests, and he needed a test. So he went into his own facility and they asked for his insurance information. So he gave it to them. Well, he got the test. Everything went fine with the test. He gets his explanation of benefits. It was golden rule Insurance, which is owned by United Healthcare. And he had been charged $10,984 for the test. And even more shocking, his insurance company had paid it at 100%. So there was no discount. There was $10,984 paid by his insurance company for the COVID test. Dr. Sussman was so alarmed, he immediately resigned from his position to see his own, his own freestanding emergency room do what he said in his email to them appeared to be fraudulent. He said, I cannot be participating with this business. He quit immediately. He also called the insurance company. And the insurance company, he called the fraud department. They just kind of shrugged their shoulders. They kind of were like, well, yeah, sometimes that kind of thing happens. But again, it just illustrates the insurance companies are not the guardians of our healthcare dollars that we expect them to be. And so we have to protect our own money. And so Sussman ended up resigning after my story came out. He contested it after my story came out. They eventually refunded the money. So they did pay the money back. But there was no evidence of wrongdoing. There was no further investigation that we know of. And this kind of thing happens all the time. And that's also, I have a whole chapter in the book in the employer section on fraud. And if employers are not bringing in a third party company that can look at their claims and look at their data and see if they might be having some suspicious billing and payment patterns, they really need to do that. Because fraud is so common, experts estimate it might be consuming 10% of all of our healthcare spending. And that's including in the commercial health plans. And if you look at like Medicare and Medicaid, you see headlines all the time about doctors having to repay money, freestanding emergency rooms or hospitals or clinics or labs having to repay money to the government. You see people getting criminally convicted. That's Medicare and Medicaid where they have government investigators that actually police this stuff and hold people accountable. In the commercial insurance plans, all they have is insurance companies. And again, they treat the doctors and hospitals like their customers, not someone they're holding accountable. And so even when they catch people, there can be blatant cases of fraud just like this one you're talking about. Sounds like some serious over treatment and sounds extremely, extremely suspicious, right? To not do anything about that. It just enables it to go on and on. And again, employers are not really paying attention either because they're trusting the system. And that's the thing, they shouldn't be trusting the system.

You have some numbers, you've tried to alert insurance companies to fraud on more than one occasion. I believe, I think the responses that you get are so interesting.

Yeah, I called all the big insurance companies because I had done so many stories about fraud. And I talked to more than a dozen fraud investigators who worked for those same insurance companies. All the investigators said, we see fraud all the time. We catch it every day, but we take it up to our higher ups, the attorneys who work for United Healthcare or others. In fact, I spoke on the record to the General, one of the. One of the counselors, the attorneys for United Healthcare, and she said, it's too expensive to pursue the fraud.

Right.

To push it. UnitedHealthcare doesn't want to pay to prosecute hospitals and doctors. They're going to lawyer up. It's going to be expensive. So I challenged all of them. I said, would you please send me all the cases where your Special Investigations Unit has led to a repayment or a criminal conviction? Because it's public record. Right. If it's a criminal conviction or a civil lawsuit, that's public information. There's no privacy to protect. Guess how many cases they sent me where they had done that? Zero. Zero. And that doesn't mean it has never happened. But wouldn't they proudly put that forth? Wouldn't they be like, I'm so glad you asked, because we're putting out press releases every time we bust a doctor or a hospital for fraud. It's not happening. And so they're managing our money and they're letting it all flow right through. They're not checking the claims, they're not checking high prices. They're just letting it go.

You have two really specific examples of that. One was in New Jersey with the teachers health Plan, but the other was in Texas with Southwest and UnitedHealthcare. And I think that that one was really interesting to me and is really indicative of kind of how many tentacles fraud has in the commercial market. Would you tell us a little bit about that?

Well, it's also indicative of the loopholes in our payment system that are big enough that you could drive like a semi truck through. Right. Because in Texas, a guy in Fort Worth, Texas, named David Williams, he was a personal trainer. He wasn't a doctor. He had no medical training. He went to Medicare and he applied for National Provider Identifier numbers. The NPI number is like the thing you need as a doctor or a hospital to bill insurance companies and bill Medicare. Well, the big loophole here is that Medicare does not actually check to verify that someone's actually a doctor before they give them an NPI number. So anybody could apply for an NPI number and get one within about 20 minutes online. And David Williams got about two dozen of these NPI numbers, and he started sending bills to United, Aetna, Cigna, all the big insurance companies. Over a span of four years, he billed them about $25 million and got paid more than 4 million. Until finally, after it reached absurd levels where they would catch him, they would tell him he needed to repay the money out of the same funds they were paying him, which they shouldn't have been paying him any money anyway. They would catch him, and they would say, you need to repay us. He would stop using that NPI number, and he would just start using another NPI number with his same name, same address. This guy wasn't a criminal genius here. This was a guy who just was brazen enough to go through the front door, start filing claims and getting checks. It was that easy for him. And Southwest Airlines was the biggest victim of that fraud. I want to say about 2 million of those dollars came from Southwest Airlines because their flight attendants were getting some. Doing some of these workouts, and then he was billing the workouts as if.

They were doctor visits.

I'm seeing a lot of questions here. Do you want to get some of these questions?

I do. So they are. Yes, we're sending out copies of the books.

So when working with employers and health insurance is not the primary topic of question of discussion. Is the question about whether or not they're aware of spread pricing a key question to open the door? Probably not. I think better questions are related to employee satisfaction and the intention of the health plan. Spread pricing, you know, that's a detail that makes insurance people crazy, but really nobody else cares.

Yeah. My hope is, I guess what I'm trying to appeal to. To employers is that they've had year after year. I mean, I don't know, but it must be very dissatisfying for an employer to keep raising the premiums and the deductibles.

Right.

They know that their workers can't bear this cost. So I'm trying to appeal to them to say, look, you can equip and empower your employees, and you can do things in a different way yourself if you're willing to engage this issue in a little bit different way and kind of reframe the way you look at it. In fact, I'm wanting to do, and I don't know if any of your employers would be interested in, I want to do zoom meetings with employees where we do an employee education session where I tell them here are 10 ways you can save big money on your healthcare right now. Like, I would love to do that with employers and employees.

We have a list.

Well, great. So we can do that. And I would love to do that if there's any advisors on the call that want to do that too. But I think to open the door to say, look, this is about employee protection, employee empowerment, employee retention, and we can help our employees. And my hope with the book too is that I know that a lot of employers are reticent to make changes because they're going to get a lot of complaints from their employees. Right. Their employees are going to say, well.

What do you mean?

I can't have my Blue Cross health plan? Or I can't have my Aetna health plan. But if the employees understood how the system works and how some of these brand name companies are not actually protecting their compensation, the employees might be more amenable to doing something differently. And so I'm actually hoping that we can start a little brush fire at the employee level and then it'll get up to the CFOs and the CEOs and the HR department so that they'll be empowered and emboldened to make some of these changes.

So Mike Hill, who might be the smartest person around and also a Broker of the Year finalist, so everybody knows, says that the best way to picture the healthcare system is the Apple TV ad from 1984. It is a broken system with robots just going through the motion. No one inside the system asks for why. And I think that's pretty accurate.

Yes.

In fact, to piggyback on Mike's comment, thank you, Mike for your comment. In this David Williams case. It was such a rich case because there he was convicted. Eventually he's now in federal prison.

And so there was this amazing testimony.

By the special investigative unit leaders for Aetna, Cigna and United, where on the.

Record they said we ought to adjudicate.

All of our claims. So if the claim, if you fill in the right date, an actual NPI number, an address of service, just some basic stuff, they'll pay it.

They don't look at it.

The computer process it and spits out checks.

So like Mike is saying, it really is like an assembly line with no quality control mechanism.

I want to talk just for a second about cross plan offsetting. And this is a subject that makes me crazy, is horribly complicated, but a.

Very big problem in health care.

So what this gentleman, Mr. Wilson did is he submitted all of these fraudulent claims when they were caught by UnitedHealthcare. And I think you might have heard Marshall, might have caught Marshall, say it before is unitedhealthcare just tried to claw back the money. So.

But what happens then is they may.

Be successful in clawing back money, but the employer never gets credited for the clawback. So your claims are artificially elevated. So even if the mistake, fraud, overbill, double bill, whatever you want to call it, is caught by the insurance company, you are probably not getting credited back for that. And that is a huge problem.

So Kimberly Williams, Kimberly Langford, not Kimberly.

Williams, sorry, who has spent her life in the healthcare system, thinks that all of this is eroding public trust and will have serious consequences for people coming down the road. Do you agree with that?

I totally agree. In fact, sadly, we now have people.

Who are deferring the care that they need because they can't afford it or because they're afraid of getting surprise billed. In fact, just a really.

Sad, sad example of this is a young woman.

I helped with her medical bill.

Again, she got price gouged because her United Health Care plan had negotiated a discounted rate that was totally unfair to her for a hospital bill. So she had to fight the hospital. She eventually got the bill taken care of, but it caused her so much anxiety to fight this bill in her case that she wanted to go to counseling, but then she was afraid of what the negotiated payment would be for United Health Care with her counselor. So here she needed counseling, she wanted to go get help, but she was afraid, what if my insurance company has also negotiated a bad rate for me to get counseling? And so these things compound on one.

Another and we now have such a.

Breakdown of trust, especially when you look at like the pharmaceutical companies, you know, people know that these price hikes have not been justified by actual improvements in the drugs they're receiving. There are so many games that get that take place.

And this is also where one of.

The most popular audiences for my books, at least according to the Amazon rankings, has been family medicine. And I think it's really interesting how the doctors, the nurses, the other clinicians, they're victims of this stuff too.

They're not generally the problem.

The problem is the business side of the industry where they've created these schemes to take our money. And it has nothing to do with the quality of care that we need.

I think many providers just would like to be in the business of being doctors. They don't want to in the business of being a collection agency or a, I don't know, whatever else. And they just Want to be paid.

A reasonable amount of money. And there are, you know, one of.

The fastest growing parts of health care is direct primary care or direct patient care. And those doctors have pretty much opted out of the insurance system. And it's fascinating to talk to them.

Yeah.

And that is a remarkable way to get care into the hands of people. Right. You can just call this person. You have pretty solid, if not round the clock, almost round the clock access. And really a primary care physician can take care of almost everything that you need. They don't do heart surgery, they don't do cancer treatment, but you know, your garden variety stuff and really help with some of the serious issues that we have like metabolic syndrome. You know, I'm in South Texas, Metabolic syndrome is going to kill South Texas.

So I think that's a fascinating thing. And I also think I'm going to irritate a few people.

I know, but people put too much faith in doctors and we don't give people good tools to find out who is a high quality provider. I mean my mother was going to a cardiologist with a score with a quality score of 27.8 out of 100 on an index that hospital systems use to judge their own physicians. Wow. We can do better than that without a whole lot of effort.

Yeah, agree, agree.

So before we wrap up, we have a few more minutes for questions.

I've got one open question here.

Okay. What has your experience in this space with large employers who have clients in the major payer provider space, for example, big four accounting firms at all been? I don't have any big four accounting firm clients. Marshall, do you have any insight on that one?

You know, I don't have a lot, but, but, but what I will say is some of the more progressive things that you see are happening with some big employers like Walmart for example, with their center of excellence kind of model they have for surgery. That's a very progressive thing to do that I think every employer should be looking at on one level or another where they tell the employee, and excuse me if I'm getting this wrong, I've just read studies about it and stories about it. I haven't actually reported it out myself, but my understanding of it is that they will tell employees they'll identify a value priced hospital for say orthopedics who also provides high quality care and then they'll waive all the cost sharing and coinsurance for that worker to go to that place for their orthopedic procedure. And if the worker wants to go to another Facility, they can, but then they have to pay their coinsurance and their co payments and those costs are obviously a lot higher. And then they negotiate a direct payment arrangement with that facility. That's a fair price. And then the facility gets rewarded with all that business from Walmart. Now some people might say, well, Walmart's so huge, how are we going to do that? But you are seeing now smaller groups of employers in different cities band together, create some direct contracting relationships. We are seeing this happening now because employers are realizing, okay, we can do things differently now. These things do work. And by the way, these doctors and hospitals, they would love to be in a direct pay relationship with you as an employer where they don't have to go through the nightmare of getting paid by the insurance industry because just as I said, the fraud is rampant. The payment problems are so out of control. There are some insurance companies that have a 30% rejection rate on their claims. And I'm not absolving the doctors or hospitals that work with them. Maybe it's their fault. But some insurance companies have much higher claims rejection rates than others. And so the frontline doctors and hospitals might really like that direct contracting center of excellence model.

And I would add, if you are in a smaller, if you're not in a huge urban city and you have a community or regional hospital, those hospitals, they are hubs in their communities. They typically deliver good quality care and they are often quite amenable to having a relationship with employers so that they can keep the care in their own system. And I know we've criticized hospital systems a lot, but there are some ways unique needs that they have that a typical employer wouldn't. They have different staffing requirements, they have different. To operate a hospital is quite a complex operation and it is a bit like steering a glacier. So the more that they can do in their communities, the better it is, particularly for the community systems.

You don't want them to go away.

And that is a big problem in smaller towns and rural areas, is that their hospital systems, their hospitals are gone. They don't have a place to go. This place, this client I was talking about earlier, they went to an urgent care facility. They literally don't have a hospital within 50 miles.

Wow.

So that's a whole different kind of issue.

Talk for just a second. Somebody has asked many times. The brokers and consultants are also paid by the carrier. There is a conflict of interest to perform full audits and or go back to the carrier for refund. I know you have a pretty strong opinion about this.

Yeah, I have a whole chapter in the book about it. And this is where I call it the conflict of interest that's undermining employee health benefits. You know, if you're, it's the standard traditional way for the brokers to be compensated is through the carriers and through the PBMs and others. And there may be contracts like, looks like Colleen here is saying, where there's restrictions on auditing the plan and auditing the payments. Some of these contracts, I mean, I've pulled some of these ASO agreements. They're like, you're only allowed to audit 20 claims that we select for you to audit. I mean, the auditing is a joke. It's not an actual audit. It's certainly not independent. And so I encourage people, at least you need to know and you will know soon because beginning next year, you'll be required to know all of the direct and indirect compensation that your broker or advisor is getting. And a good advisor will have no problem sharing this with you. They're not going to be worried about it. They're not going to give you the line that my friend just got from his where they said we don't have to tell you that we're not going to. Right. If that's the answer, you want to start talking to someone else. But I do encourage people, employers to look and see if your advisor would be open to a direct pay relationship from you where they only get their money from you. And these advisors are worth their weight in gold. So you want to have a good advisor, but if you pay them directly, they're still going to make their fee which they are earning, but they're being paid by you. So now they're incentivized by you to deliver the best value for you. So that's my take on that. Alison, I'm curious what your thoughts are about that.

I agree. We disclose our fee.

We have never had a problem with.

Anybody paying our fee. Now we do often, you know, most.

Of our business is self funded and.

With the TPA we do include that in the monthly bill. But it is clearly disclosed broker fee.

And I think that's fair. We don't take any additional compensation. If there is somewhere else, we're getting additional compensation, we disclose that. And there are a number of advisors on this call. We all work the same way. We all do different things and have different specialties. But we all disclose our fees and we're very clear that this is what we're paid. And we often will work on a performance basis as well. So that if we meet your goal, then we earn more compensation. And I think that's fair, too. We work hard.

Yeah. Let me ask you this question. How many advisors, brokers out there are in the relationship? Like my friend is finding it's Gallagher actually is the name of his company. I'll just go ahead and say it. But how many of them are in this type of relationship where they're not. Maybe the employer is not aware of all the money that their broker is making.

97%.

Yeah. That's my impression too. This is the norm. And starting January 1st of this coming year, there are going to be some very awkward conversations as employers now are required to find out about the indirect and direct compensation from their benefits brokers. It's going to be very interesting to see. I think it will spur a lot of change. I think it will spur people to start seeing a little more how the system operates. I'm sure many still won't change, but I know that some will. So I'm encouraged by that.

I think we have time for one more question. We have somebody that's asking any comments on the recent San Diego lawsuit against kp, which I'm guessing is Kaiser Permanente Molina and Health Net regarding massive inaccurate in network physicians. Patients think they are seeing an in network doctor only to be billed for an out of network because the in network info is outdated, inaccurate, it, et cetera. I have an opinion about that, but I'd be interested to hear yours.

You know, I'm not even aware of.

It, so I missed that one. So I'm interested in hearing your thoughts, Alison.

So anybody in the, in the advisor business, broker Advisor business will tell you that one of the big problems that they have with employer groups is that an employee has made a good faith effort to do what they are supposed to do and they end up with a bill, typically for a radiologist and anesthesiologist, a pathologist, an ambulance, those would be the most common where they thought that they were in the right place. And if you're in the right hospital and you're unconscious, there's really not a lot you can do if your anesthesiologist is not in network or if your ER doctor is not in network, it happens quite a lot there too. And then the patient gets a surprise bill for sometimes thousands and thousands of dollars. And then what do they do? And insurance companies, I think when you talk to the people, they kind of feel empathy, but there's nothing that they can do. They pay it according to their contract because really, insurance is contract law.

That's all it is.

And then the patients are stuck. There is federal legislation that is addressing those issues, but this is obviously a past issue. It's going to be very interesting to see how this plays out, especially now that you cannot do that. And there are very specific arbitrations that need to happen in certain timeframes. So I think we're going to see a lot of that go away. And Texas remarkably, has done a wonderful job with surprise billing legislation. You basically can't do it. But only in fully shared, not in full, only in fully insured plans because they're regulated by the state.

Plans are federal regulation.

Yeah.

Fascinating.

Does anybody have any other questions or.

We are at the 3 o' clock.

Hour and I hate to keep people any longer. Even though Marshall and I could talk about PBMs for hours and hours and.

Hours, we could talk forever.

So. All right.

I don't see any more questions. So I am going to thank everybody for coming. You will get an email from from us about your address for a book. There are quite a number of people on the call today, so I'm not sure we might be out of books. But thank you everybody for attending and please let us know if you have questions how we can help you. And before we hang up, Allen Health Academy. I'm going to hold people for a minute.

Tell us about that.

Well, so Allen Health Academy is a business I've started based on the book. I'm creating a series of engaging health literacy videos that explain the principles in the book in a really interactive, engaging way. Look for it, you can go to my website, marshallallen.com and subscribe to my newsletter there for kind of the latest updates. But I really just want to thank everyone for joining. Alison, thank you for asking me about the Academy. So stay tuned because there's a lot more coming from me. I'm really on a big push here to improve healthcare literacy for employees and.

I think it's a mission well worth doing. So thank you everybody for attending and.

Be on the lookout for an email from us.

And Marshall, thank much so you so much for doing this for us.

Thank you. I appreciate the invitation. Bye everyone.

Bye bye.

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