DOL tends to consider all TPAs to have some fiduciary duty, since it is virtually impossible to do TPA duties without exercising some sort of "discretionary authority" over the plan & assets (such as deciding which claims to pay and not pay). Selection of service vendors to the plan (when paid by or affecting plan assets), such as TPAs, stop-loss, etc. is also considered covered by fiduciary duty. DOL has also long contended that a plan's selection of medical providers can also be subject to fiduciary duty when/if plan assets are involved. (See enclosure with April 29 UPDATE discussing "Administrator" & Fiduciary" status.) That is now etched in stone (or at least in an official DOL Information Letter).
Among the fiduciary considerations is the "quality" of the medical provider & care, if selected in any way by the plan (such as PPOs, HMOs, managed care, PHO/PSO, etc.) It should be evaluated (just as the quality of a stop-loss insurer is taken into consideration when making the fiduciary decisions about procuring stop-loss).
DOL issued an Information Letter with official date of February 19th, setting forth the factors that DOL believes should be considered in evaluating the quality of a health care product:
- Scope of available choices.
- Qualifications of medical providers & specialists available to participants.
- Ease of access to medical providers.
- Ease of access to information concerning the operations of the health care provider.
- Timely resolution of considerations & resolution of patient complaints.
- Confidentiality of patient records.
- Enrollee satisfaction.
- Rating or accreditation of health care providers.
Putting this into perspective:
(1). This has the effect of law right away, because it is simply an interpretation of a 1974 existing law (ERISA fiduciary). It is not just some bill floating in Congress, like all the rest of the "quality" legislation.
(2). The good news is that you can tell Congress that for employee benefit plans subject to ERISA (the vast vast majority in the U.S.), the issue of assuring medical "quality & protections" has already been solved. No need for more laws. In other words, let them declare victory and go home to campaign.
(3). How can client plans & TPAs know if they made the right fiduciary decision? It's like every other fiduciary decision (choosing a TPA, choosing stop-loss, etc.) Looking a DOL investigator in the eye, DOL says, "the fiduciary must be able to demonstrate compliance with ERISA's fiduciary standards" (via the checklist above).
The next SPBA Client Newsletter (designed for you to send to your clients as your own) will have a simplified version of this article for you to share with clients, brokers, and all sorts of medical vendors.