EP453: Running a TPA (Third-Party Administrator) RFP Process That Is Less of a Wild West Fiduciary Shootout, With Claire Brockbank

In this episode, host Stacey Richter delves into the complexities of the Third Party Administrator (TPA) Request for Proposal (RFP) process with guest Claire Brockbank from 32BJ Union. The discussion highlights the critical role of contracts in managing health plans effectively and the potential pitfalls of accepting contracts crafted by TPAs without thorough review. Drawing from Claire's experience, they explore tactics like starting with your own contract paper in RFP processes to gain negotiation leverage, and the benefits of employer coalitions in navigating healthcare complexities. As one example — and Cora Opsahl spoke about this in the prior episode, and Claire talks about it here too — allowing upside-down payments, common in a lot of ASO contracts, meant that 32BJ spent around $10 million paying more than the bill was for in one year. If a plan signs the contract as handed to them by the carrier, the plan is contractually obligating itself to pay more than the price the clinical practice actually charged: a doctor sends a bill for $100, and the carrier pays that practice $200 on the plan sponsor's behalf, leaving the plan sponsor paying $200 for a $100 bill. Real-world examples underscore the financial impact of poorly negotiated contracts and highlight successful strategies for health plan sponsors to optimize costs and services.

WHAT YOU'LL LEARN

✅ Why accepting a TPA's own contract paper without review can quietly cost a plan sponsor millions — illustrated by 32BJ's real $10 million upside-down-payment example

✅ How starting an RFP process with your own contract paper, instead of the carrier's, gives plan sponsors real negotiation leverage

✅ What "upside-down payments" are, and why they can turn a $100 bill into a $200 charge to the plan sponsor

✅ Why employer coalitions and open-source contracts, like the one 32BJ makes available, help level the playing field against carriers and TPAs

✅ Why it's important to keep probing brokers and consultants, even loyal ones, throughout the RFP and contracting process

WHY THIS MATTERS

Is paying $200 for a $100 bill a conflict of interest? Imprudent? A fiduciary breach? Claire Brockbank's answer, backed by 32BJ's own numbers, is that plan sponsors who sign TPA-drafted contracts without review are often unknowingly agreeing to exactly this kind of upside-down payment structure — and the fix starts with writing the contract yourself.

MENTIONED IN THIS EPISODE

EP433 with Justin Leader: Apple Podcasts | Spotify | Other Apps

EP428 with Julie Selesnick: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

🔗 Healthcare Industry Acronyms and Terms

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00:00 Introduction.

05:36 How does the initial contract writing affect how events in your healthcare plan will go?

06:56 What happens if a plan sponsor or employer doesn't do the contracting right?

10:42 How much could be saved by doing contracting right?

12:22 How do you start an RFP process with your own contract?

14:06 What Claire Brockbank recommends doing to do a TPA RFP process in a way that's best for you.

19:46 What factors do carriers need to get an ASO or TPA to respond to using your contract?

21:11 Open-source contract available from 32BJ.

21:57 Why it's important to really probe brokers, despite loyalty to your broker/consultant.

24:30 Who are the reliable agents and experts when carriers are looking to start this process?

27:56 What's the silver lining to this effort?

29:17 Why is it important to make it clear why you're doing what you're doing for your lawyers and any other support team you need?

31:39 What does "good" look like in this process?

34:15 Why is it important to continue to hold your ASO accountable?