EP408: Who's Suing Who? An Overview of Healthcare Legal Goings-on, With Chris Deacon

Self-insured employers are the fiduciary of their own health plan under the Consolidated Appropriations Act — a fact carriers are increasingly using as their legal defense when sued. In this episode, Stacey Richter talks with Chris Deacon, JD, a former state health plan administrator who managed healthcare benefits for over 820,000 public-sector lives in New Jersey and now runs VerSan Consulting, about the current wave of healthcare litigation: breach-of-fiduciary-duty suits against carriers, carrier-versus-hospital billing disputes, and taxing-authority challenges to nonprofit hospitals' tax-exempt status.

WHAT YOU'LL LEARN

✅ Why carriers being sued for breach of fiduciary duty are arguing that self-insured employers — not the carrier — are the sole fiduciary, and that it was the employer's own responsibility to catch any CAA-violating contract language before signing

✅ How cases like Bricklayers vs. Anthem, Mass Laborers vs. Blue Cross Blue Shield, and Member vs. Cigna are testing whether employers can actually get the claims data they need to fulfill fiduciary duties they may not have realized they held

✅ How the carrier-versus-hospital fight plays out from both directions: United vs. TeamHealth over alleged upcoding, and TeamHealth vs. United over alleged underpayment

✅ Why taxing authorities are starting to challenge nonprofit hospitals' tax-exempt status directly, including the Tower Health line of cases in Pennsylvania and Pittsburgh vs. UPMC

✅ Why Chris Deacon says the legal framework hasn't caught up with the current reality of how carriers, hospitals, and employers actually operate today

WHY THIS MATTERS

As Chris Deacon lays it out, the CAA already made self-insured employers the fiduciary of their own health plans — whether or not they realized it at the time they signed their carrier contracts. That distinction is now playing out in courtrooms across the country, and the outcomes of these cases will determine who actually bears legal and financial responsibility when a plan fails to serve its members well: the carrier that wrote the contract, or the employer that signed it without the leverage or the data to know better.

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

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00:00 Introduction.

04:47 What does the current legal landscape look like, and how does it bode for the future?

07:24 "We need to catch the legal framework up with the current reality."

19:53 How is this first circuit decision affecting who might be found liable in future cases?

21:38 What happened in the Member vs Cigna case?

24:49 Are we heading in the direction of the employer having fiduciary responsibility?

25:47 What's happening in the Carrier vs Hospital cases?

28:49 Who's really paying the price for the current business practices being examined in court?

30:00 What's happened in the Tower cases?