Episode 512

3 Kinds of Broker/EBC Rent-Seeking Payment Models—A Lawyer's Perspective, With Doug Aldeen. EP512

May 27, 2026

36:56

Episode Description

A Lawyer's Field Guide to Rent-Seeking Broker and EBC Payment Models. Epsiode 512.

Brokers and employee benefit consultants often get compensated in ways health plans never fully see — and even when the dollars are technically disclosed, the math can hide an enormous overcharge. In this episode, Stacey Richter speaks with Doug Aldeen, JD, an ERISA healthcare attorney who has spent decades in the self-funded space, about the legal danger zones where broker and EBC payment models go wrong: rent-seeking solution recommendations, undisclosed vendor payments, and front-loaded voluntary-benefits commissions — and the practical roadmap any plan sponsor can use to catch them before they cost millions.

WHAT YOU'LL LEARN

✅ How a level-funded plan's broker was paid more than $2 million in fees while the plan itself ended up roughly $600,000 in deficit — a cautionary tale Stacey and Doug call the Ohio Potato Company story

✅ How reference-based pricing vendors using a "cost of savings" fee model can be incentivized by rising hospital prices — illustrated by a $10,000 CT scan repriced to $1,000, netting the vendor $1,800 on a $9,000 "savings," on top of underlying facility markups that can run as high as 17,000%

✅ How a balance-billing vendor collected $2.2 million in fees over three plan years to protect against just $94,320 in disputed claims — even in a state where the hospital had no legal authority to balance bill in the first place

✅ Why voluntary benefits commissions, often front-loaded at 70% to 90% in the first year, can make a product more profitable for the broker than useful for members

✅ A practical roadmap for plan sponsors to catch rent-seeking arrangements before they cost millions: ask why repeatedly, demystify the commission structure, run an independent broker RFP, audit plan and stop-loss documents for gaps, and build a real contract "out"

WHY THIS MATTERS

Self-funded employers often assume their broker or EBC's incentives are aligned with the plan's. But when compensation is tied to cost-of-savings formulas, undisclosed vendor relationships, or front-loaded commissions, the incentive can quietly flip — rewarding higher healthcare prices and unnecessary point solutions instead of genuine savings. Knowing where to look, and which questions to ask, is what separates a fiduciary from a rent-seeking target.

MENTIONED IN THIS EPISODE

EP457 with Cynthia Fisher: Apple Podcasts | Spotify | Other Apps

EP508 with Lee Lewis: Apple Podcasts | Spotify | Other Apps

EP379 with AJ Loiacono: Apple Podcasts | Spotify | Other Apps

EP484 with Dave Chase: Apple Podcasts | Spotify | Other Apps

EP478 with Andreas Mang and Jon Camire (Part 1): Apple Podcasts | Spotify | Other Apps

EP479 with Andreas Mang and Jon Camire (Part 2): Apple Podcasts | Spotify | Other Apps

EP419 with Andreas Mang: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Show Notes

✉️ Enjoy this podcast? Subscribe to the free weekly newsletter

🫙 Support the podcast with a small donation to the Tip Jar