I wanted to talk to a lawyer 'cause, yeah, lawyers are the ones that see stuff that falls the whole way down to the level of legal action. But I wanted to find out what are the main categories of things that wind up in legal land when it comes to broker or EBC (employee benefit consultant) payment agreements. Like, what are the top ways that compensation agreements go horribly awry?

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Doug Aldeen, my guest today, rose to the challenge. And let me just state for the record that, while there are a whole lot of brokers and EBCs who would or do engage in some of these practices, there are also many who do not; and/or it might not be the broker/EBC themselves but the company that they work for who is up to some of the things that we're gonna be talking about in the episode today.

But I really, for sure, want to support the gang of honest actors, great fee-based, integrity-based brokers and EBCs; and I wanna support them all day long, many of whom listen to the show and are part of the Relentless Health Value Tribe.

But let's talk about how the rent-seeking ones roll so that you can spot them. See what they did there.

So, yeah … the first kind of ground zero that Doug and I talk about today is just up-front direct compensation agreements, which may be just ridiculously complicated and/or ridiculously expensive compared to what others are charging for a similar group. Where there's mystery, there is margin. That is so relevant in so many situations, and this is just another one of them.

So then, after that, Doug and I move on; and we get into three categories of stuff that sits in that undisclosed or maybe even disclosed zone, where just the whole model of payments is problematic on its face.

First up (and this is a biggie), brokers/EBCs recommending rent-seeking solutions to their clients. Like, a broker or EBC suggests a solution to their client where the solution itself makes money on a perverse incentive, and then the broker or EBC gets a piece of that action, which might be called shared savings. So, yeah … even if the dollars to the broker or EBC are disclosed, a naive plan administrator might not see that overcharge for what it really is—and Doug gives a bunch of examples in the show that follows.

Chris Deacon (post) and Justin Leader (post) also wrote posts about this. Donovan Pyle wrote a whole book about it.

Okay … the next big category of typical payment model methodologies that Doug Aldeen (again, a lawyer) has seen plans get themselves into trouble with their EBCs and brokers—the ones who are sharks, I mean, circling the plan like it's a gold mine—this big category is undisclosed payments from vendors who the plan doesn't realize have a business relationship with the EBC or broker.

This can also be a whole basket of solutions that the EBC/broker wants to install, which is basically this problematic payment model at scale. And, right, this matters because then the plan doesn't know if this particular point solution, PBM, stop-loss carrier … Right? They think their broker EBC is recommending it because it's the best option for that particular plan, not understanding that it's the right option for the broker or EBC.

And these dollars can be undisclosed because, to a certain extent, the Consolidated Appropriations Act, it's a little bit unclear on certain points. There's some loopholes if you go looking for them because you are so inclined. We get into more detail on this later on.

After this, Doug offers a really great roadmap with six steps in it for any plan to really think about as they consider. First, the maybe integrity of their broker or EBC and what is being recommended to the plan.

And that's important because, look—and we say this in the conversation that follows, but I'm gonna say it again here loudly—if a plan realizes that their broker or EBC is not really serving the best interest of the plan, there are great options out there. There are great EBCs and brokers who are honest, upstanding that really care about their clients, their plans, their members, and doing the right thing.

But telling the difference between the not-so-good ones and the good ones takes some diligence, takes some validation on the part of the plan sponsor. It just does.

But the amount of dollars that can be saved is millions, and this is actually, saving those millions is actually better for the plan because it's not like those dollars were going in somebody's pocket. It's not like they were being put toward better, safer, lower premiums. These are dollars that can be cut, and the plan is actually better.

My guest today, as I have mentioned at least several times already, is Doug Aldeen, who is a well-known attorney who has spent many years in the self-insured space.

This podcast is sponsored by Aventria Health Group, and I do want to give a shout-out and a thanks to our 2026 series underwriter Payerset. Thank you so much for your financial support. That helps keep this podcast on the air.

And with that, here is my conversation with Doug Aldeen.

Also mentioned in this episode are Chris Deacon, Justin Leader, Donovan Pyle, Mark Cuban, Cost Plus Drugs, Aventria Health Group, Payerset, Cynthia Fisher, Lee Lewis, AJ Loiacono, Dave Chase, Nautilus Health, 32BJ, Andreas Mang, Jon Camire, and Tom Nash.

For a list of healthcare industry acronyms and terms that may be unfamiliar to you, click here.

You can learn more on Doug's Web site and by following Doug on LinkedIn.

Doug Aldeen is an Austin, Texas–based Employee Retirement Income Security Act (ERISA) healthcare attorney. From 1997 to 2006, he served both as associate general counsel and general counsel for provider-sponsored HMOs in Champaign-Urbana, Illinois, and San Antonio, Texas. During his tenure at Health Alliance Medical Plans in Urbana, Illinois, he had a front-row seat to the US Supreme Court ERISA case in Pegram v. Herdrich.

Since 2007, Doug has owned and operated his own law firm that serves the US self-funded market. In 2016, he served as ERISA counsel for the Berkley Research Group, who served as an advisor to the private equity firm Hellman and Friedman that purchased a majority stake in MultiPlan for $7.5 billion. From 2019 to 2024, Doug served on the government relations committee for the Self-Insurance Institute of America during the period when the Consolidated Appropriations Act was being implemented.

In 2022, Doug was featured by KXAN television in Austin in an investigative piece that examined the collection practices of a local hospital. KXAN's investigative work resulted in an Edward Murrow award for public service. For the past 10 years, he has published "The Sunday Morning Bathroom Read" on LinkedIn, which features a weekly tongue-in-cheek review of recent events and the implications to the self-funded market in the US healthcare industry.

00:00 Introduction to this episode.

00:59 A caveat for the record on this episode.

02:11 The first problematic payment model discussed in this week's episode.

03:27 The second problematic payment model discussed in this week's episode.

06:16 The conversation with Doug Aldeen.

06:27 Why is reviewing broker/EBC compensation so important?

08:05 The Ohio Potato Company anecdote.

10:28 The first way brokers/EBCs might get paid.

11:45 What "cost of savings" means.

12:31 EP457 with Cynthia Fisher.

14:07 A rent-seeking solution that requires a cost-benefit analysis.

19:16 Why the broker/EBC is sometimes in the dark about vendor kickbacks.

21:46 Where the CAA is unclear.

22:23 EP508 with Lee Lewis.

22:58 EP379 with AJ Loiacono.

24:04 Actionable advice for plan sponsors.

24:57 The second piece of actionable advice for plan sponsors.

25:22 The third piece of actionable advice for plan sponsors.

26:08 Demystifying the commission structure.

27:35 Using a broker RFP from an open source.

27:54 EP484 with Dave Chase.

28:31 Why you should be auditing data and claims.

29:29 EP478 (Part 1) and EP479 (Part 2) with Andreas Mang and Jon Camire.

31:29 The importance of having an "out."

33:11 Why the broker community may be at substantial risk.

35:30 EP419 with Andreas Mang.

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