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Self-funded health plan sponsors are fiduciaries, giving them special status and corresponding special responsibilities under the law. It is crucial for plan sponsors to understand their fiduciary duty and the related actions required for both ERISA compliance and successful administration of a self-funded health plan.

Self-funded health plans are HIPAA Covered Entities and must protect their participant’s health information. They must also take steps to ensure that their business partners protect the health information by requiring that they sign a Business Associate Agreement confirming the partners’ commitment to comply with HIPAA.

Data analytics firm Trilliant Health recently released a study regarding the wide variability of healthcare costs across the United States. It may contain shocking revelations for the common reader. However, the unreasonable and largely volatile prices – which the study notes have little to no correlation to the quality of care rendered – are nothing new for many insiders who routinely interact with the healthcare pricing and payment ecosystem.

This post from healthcare advocate and thought leader Chris Deacon raises important issues regarding self-funded health plans and the hurdles plan sponsors encounter while fulfilling their fiduciary duty.

Many people in the healthcare payment industry often conflate and sometimes misuse the terms “audit” and “bill review” and/or “claims review.” In reality, these terms refer to two separate and distinct processes with different rules and considerations. While audits may be subject to specific contractual requirements, self-funded plan sponsors have an affirmative responsibility and duty to review their claims data prior to payment in light of ERISA’s mandatory fiduciary duties.