Feb 29, 2024
No prudent fiduciary would knowingly agree to pay 250 times more than the price available to anyone off the street — yet that’s the core allegation in the J&J lawsuit, where the company is accused of paying upwards of $10,000 for a drug available for cash for about $50. Rather than rehash the gory details of the J&J and DOL v. BCBS lawsuits, Julie Selesnick, senior counsel at Berger Montague’s Employee Benefits and ERISA group, joins Stacey Richter to answer the more urgent question: if you’re a plan sponsor, broker, or employee benefit consultant, what should you actually be doing right now?
WHAT YOU’LL LEARN
✅ Why getting your claims data is step one for every plan sponsor — and why that may require renegotiating administrative services agreements and scrutinizing CAA-mandated compensation disclosures from every covered service provider paid more than $1,000, not just brokers
✅ Why plan sponsors now need to verify not just that claims were paid correctly, but that the prices themselves — especially for generic specialty drugs — are fair and reasonable
✅ Why a payment integrity vendor should never be the same vendor (or share a parent company with the vendor) processing your claims — and why that setup is an obvious conflict of interest
✅ What cross-plan offsetting is, why the Department of Labor and multiple courts have found it violates ERISA, and why it’s still happening at the majority of health plans anyway
✅ Julie Selesnick’s practical advice for administering a plan well: form a health and welfare committee with an independent fiduciary expert, and make sure every committee member gets real fiduciary training on prudence, loyalty, self-dealing, and prohibited transactions
WHY THIS MATTERS
The J&J and DOL v. BCBS lawsuits aren’t really about two isolated bad actors; they’re a preview of what happens when plan sponsors have the data to spot a problem, don’t act on it, and get named in a complaint alongside their brokers and consultants. Julie Selesnick’s advice isn’t about panicking over an impending wave of litigation — it’s about closing the gap between what plan sponsors are now capable of knowing and what they’re actually doing with that knowledge, before a lawsuit forces the issue.
MENTIONED IN THIS EPISODE
EP408 with Chris Deacon: Apple Podcasts | Spotify | Other Apps
Encore! EP379 with AJ Loiacono: Apple Podcasts | Spotify | Other Apps
Encore! EP337 with Olivia Webb: Apple Podcasts | Spotify | Other Apps
EP285 with Dawn Cornelis: Apple Podcasts | Spotify | Other Apps
=== LINKS ===
🔗 Show Notes with all mentioned links: Episode Page
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=== CONNECT WITH THE RHV TEAM ===
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00:00 Introduction.
05:48 What’s happening with the J&J lawsuit?
07:38 What’s going on with the DOL v BCBS case?
08:49 What do these cases mean for plan sponsors?
09:21 Why is engaging with claims data critical?
12:30 EP408 with Chris Deacon.
14:20 EP379 with AJ Loiacono.
16:58 What’s one solution to avoiding a conflict of interest?
18:02 Why there’s still not a total understanding about what to do with claims data once acquired.
20:58 NADAC (National Average Drug Acquisition Cost) to check pharmacy prices.
21:31 What advice do plan sponsors need to know that never gets recommended to them when dealing with conflicting interests?
27:02 EP337 with Olivia Webb.
28:41 EP285 with Dawn Cornelis.
30:24 “As a fiduciary, your money should only go to pay your plan’s benefits, not to other plan benefits.”
30:59 What’s Julie’s advice to advisors?
33:17 “Giving nonconflicted advice … is something you really can only do if you have no conflicts.”
35:57 What’s Julie’s advice for administering whole plans?