Effective health plan governance: A path to lower costs
How to improve health plan governance and save costs while meeting regulatory Changes and transparency needs.
Navigating the complex world of health plan governance and cost containment is more critical than ever. Regulatory changes, increased transparency demands, and fiduciary responsibilities are reshaping the health plan landscape. This article, featuring insights from KPMG benefits professionals, highlights key concerns and strategies for chief financial officers (CFOs) and financial leaders to help ensure compliance and financial efficiency in their healthcare plans.
Building a Strong Foundation for Fiduciary Governance and Compliance
Health plan sponsors, much like retirement plan sponsors, are bound by fiduciary duties, including the duty of loyalty, prudence, and the exclusive benefit rule. The Consolidated Appropriations Act of 2021 (CAA) has introduced new transparency requirements, such as the No Surprises Act and the disclosure of broker and consultant compensation. These changes have led to a surge in government investigations and participant litigation, underscoring the importance of robust fiduciary governance. Here are steps organizations can take:
1
Establish a Health Plan Committee:
Form a dedicated committee to mitigate fiduciary responsibility for senior management and ensure that all governance practices are well-documented and referenced in plan documents.
2
Analyze Fee Disclosures:
Regularly review and analyze broker and consultant fee disclosures to identify any potential conflicts of interest and ensure transparency.
3
Monitor Service Providers:
Continuously monitor health plan service providers to ensure they meet the health plan’s standards and regulatory requirements.
4
Conduct Independent Audits:
Perform independent claims audits and contract compliance reviews to maintain the integrity of the health plan and address any issues proactively.
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Effective health plan governance: A path to lower costs
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