Health & Welfare Fiduciary Governance and PBM Advising

/Overview

Our team delivers end-to-end guidance on health and welfare plan governance to help clients establish and maintain effective fiduciary oversight structures, comply with fiduciary obligations in the course of plan administration and design, monitor service provider performance, and resolve regulatory investigations and private disputes.

An acute issue involves ERISA fiduciary duties related to the evaluation and monitoring of PBM performance, fees, and financial guarantees to ensure plan assets are not wasted. Our team offers deep industry knowledge to guide you through PBM plan administration and reduce costs while still achieving your business objectives. We are well-versed in all aspects of fiduciary compliance—evaluating your existing PBM contract, managing PBM RFPs, advising on new PBM implementation, guiding annual financial and contract compliance audits and recovery, and more. We’re particularly skilled in negotiating market-forward fee arrangements and strong contractual protections against hidden PBM revenue streams.

/Representative experience

• Develop H&W Fiduciary Governance Committees: Given the increasing risk of fiduciary litigation under health plans, we have assisted many companies and organizations with the development and operation of ERISA fiduciary governance programs for health and welfare benefit plans. This includes preparing committee charters, reviewing and attending committee meetings, and preparing meeting minutes.
• PBM RPF and implementation for group health plan with 300,000+ members: Advised client in connection with a PBM RFP in which the incumbent was not retained. Our assistance included drafting RFP materials, working with pharmacy consultants to analyze RFP responses, participating in finalist meetings, negotiating the contract, and resolving implementation and audit issues. We successfully achieved greater revenue transparency for the plan and reduced annual expenditures by over $50 million.
• Contract negotiations for large multiemployer group health plan: Advised on the renegotiation of a PBM agreement following a market check. We guided the client through the contracting process successfully and efficiently by utilizing our template PBM contract to improve PBM revenue transparency, ensure that negotiated pricing terms were accurately drafted, and optimize the client’s audit and recovery rights.
• Government Investigations: Currently advising several clients with respect to health plan investigations conducted by the Department of Labor, including broad-scope investigations and targeted investigations (such as mental health parity compliance).
• Audit and recovery: Following a comprehensive audit, we were retained by the client to assist with contractual and reconciliation disputes. The anticipated amount at issue is over $45 million due to multi-year violations.
• Contract negotiations for national retailer: We are advising a client on a medical and PBM RFP and evaluating carve-in and carve-out PBM alternatives. The anticipated cost savings are several million dollars.
• Audit and recovery: Following a rebate and ingredient cost audit, we are advising a client with a reconciliation dispute. The anticipated amount at issue is over $500,000.
• PBM RFP and contracting: Representing a multinational financial services corporation in its RFP evaluation of a PBM.