Consumer / Employer, Legal

The Kraft Heinz Lawsuit Against Aetna Is the ‘Tip of the Iceberg’

Kraft Heinz recently sued Aetna, claiming that the insurer is not providing all of Kraft Heinz’s medical claims data. More lawsuits of this sort are likely to come, experts warned.

Kraft Heinz’s recent lawsuit against Aetna is just an indication of what’s to come in the relationship between self-funded employers and their third-party administrators.

Self-funded employers have always had a fiduciary responsibility to make sure they’re providing the best medical benefits for the best price to their employees. But the Consolidated Appropriations Act of 2021 has given employers better access to claims data to ensure that they are fulfilling this responsibility. And Aetna’s alleged noncompliance with the law is at the heart of this.

“What the law says is that employers cannot enter into an agreement with a third party service provider or network carrier that would limit [the employer’s] access to their [own] de-identified claims data,” said Chris Deacon, founder of VerSan Consulting, in an interview. “What it does is it inherently recognizes that the claims data is the employer’s and it says you can’t contract with a party that limits your access to that data. The onus is really on the employer to make sure that they’re not party to such agreements. The implication there is very direct that the employer has an obligation and responsibility to be looking at that data … to make sure that they’re spending their plan assets prudently.”

But third party administrators aren’t always complying with this, some say. This is what Kraft Heinz alleged in its June 30 lawsuit against Aetna. Kraft Heinz said that it made a formal request of Aetna for its medical claims data in the “format Aetna is required to maintain.” Then over a year later, Aetna gave the company “some self-selected and edited medical claims data for 2016 through part of 2022,” according to the complaint. The information Kraft Heinz is missing includes “accurate information regarding actual payments to providers,” “prior authorization number and type” and “coverage beginning and termination dates,” the complaint said. 

“Without this data, Kraft Heinz is unable to assess Aetna’s handling of the Plans’ funds and associated payment integrity,” the lawsuit states. “Kraft Heinz owns this data and has an absolute right to it.” 

Deacon added that the format Kraft Heinz requested the data in is a standardized format. She declared the reason Aetna isn’t providing full access to the data is because it knows that Kraft will find errors Aetna made.

It’s also important to note that the lawsuit is not just about Heinz not having access to data. Based on the data the company did have access to, Kraft Heinz is also alleging that Aetna “paid millions of dollars in provider claims that never should have been paid, wrongfully retained millions of dollars in undisclosed fees, and engaged in claims-processing related misconduct to the detriment of Kraft Heinz.”

Aetna declined to comment.

Kraft Heinz isn’t the only one suing payers. Two unions — Bricklayers and Allied Craftworkers Local 1 Fund and Sheet Metal Workers Local 40 Fund — filed a class action complaint against Elevance (formerly known as Anthem) for not providing access to their claims data. The Massachusetts Laborers’ Health and Welfare Fund sued Blue Cross Blue Shield of Massachusetts for similar reasons in April.

These lawsuits are just the beginning of what’s to come, said Cheryl Larson, president and CEO of Midwest Business Group on Health, a nonprofit supporting employers.

“I’m concerned that if a company as big as Kraft Heinz is being cherry-picked, what’s happening to the rest of the employers in this country?” Larson said in an interview. “I can’t imagine that other healthcare stakeholders are ready for what is about to happen. … I think this is the tip of the iceberg.” Larson’s use of the phrase “cherry-picked” refers to insurers not providing employers with full access to their claims data, thus making it difficult for employers to complete full reviews of their health plans.

What can employers do? They need to conduct a “deep dive” review into their advisors — including their consultants, brokers, TPAs and PBMs — to understand if there are any conflicts of interest, Deacon said. 

“Most employers to date have been sort of relying on third parties for advice and counsel and it’s really misplaced,” Deacon stated. “They first have to understand where they’re getting their information and how that information might be skewed or conflicted. … They need to surround themselves with unconflicted professionals that can give them really good and smart advice.”

For example, since employers don’t always understand healthcare benefits, they’ll sometimes lean on benefits consultants for advice. However, sometimes PBMs and TPAs are paying consultants and advisors to direct employers to their organizations, Deacon alleged. The largest PBMs include OptumRx, CVS Caremark and Express Scripts, while the largest benefits consultants in the country include Mercer, Willis Towers Watson and Aon. The National Alliance of Healthcare Purchaser Coalitions also claimed this is happening in a playbook it recently released for employers on managing drug costs.

After looking into their advisors, employers should set up a fiduciary committee to review health plan spending and contracts.

“I think if there’s one piece of advice [I have], employers have to lean in to having really uncomfortable conversations right now,” Deacon declared. “I understand that they might have a 20-year relationship with their broker, they might have a 30-year relationship with their consultant, they might have a 10-year relationship with their TPA. Nevertheless, you have to lean in now to having really uncomfortable conversations to understand what’s what in the state of your health plan and then take swift action.”

If they don’t take these steps, then employers are at risk of being sued themselves by their employees for not fulfilling their fiduciary responsibilities.

“There’s a window of opportunity for the employers to giddy up and do the right thing and get access to their data and begin to really engage in a more hands-on management style with their plans’ money, as they have to and should be doing,” Deacon said. “But that window is not forever. … If employers don’t do that, they’re going to end up on the receiving end of that complaint and the plaintiffs are going to be their employees.”

Photo: Valerii Evlakhov, Getty Images