Q3 RAD Summit Insights
By Vandana Macha | September 2024
The RAD Collective recently gathered to discuss the hot button issue of fiduciary responsibility during their . Fiduciary responsibility is the legal duty that companies have to work in the best interests of their beneficiaries. Recently, many companies have been accused of violating their fiduciary duty. The Johnson and Johnson lawsuit is an example of such a breach of fiduciary duties, and the subsequent consequences. The recent news and energy surrounding the topic has caused brokers and consultants to assess their role in upholding fiduciary obligations. During the RAD virtual event, members discussed this topic and had a few key insights.
Pricing claims disparities continue to worsen.
RAD members shared some outrageous pricing claims disparities, such as a $700 charge for a pillow, $200,000 for Tylenol, and $2 million in fraudulent chiropractic claims. While not all hospitals intentionally impose these exorbitant fees, many do so under the assumption that they won’t be checked.
Brokers and consultants need to recognize the role they play in ensuring fiduciary responsibility.
If brokers and consultants want to stay ahead of the game, they should embrace their increasing fiduciary responsibilities. Failing to take fiduciary responsibility may result in lawsuits against brokers and consultants. Additionally, there may be more third-party audits if carrier mismanagement continues to increase and loss of clients who feel vulnerable due to fiduciary duty violations.
To prevent future violations and potential lawsuits, RAD members discussed how brokers can focus on clarifying ambiguities in pharmacy benefit manager (PBM) contracts and explicitly defining what PBMs are guaranteeing. Members also emphasized that they should increase transparency among vendors by including audit requirements to ensure compliance. Additionally, brokers should stay informed on evolving fiduciary laws and regularly review their contracts to make sure that they align their practices with current fiduciary responsibility requirements.
RAD members came away from this virtual event with insights and takeaways to implement in their client work to help them act as responsible fiduciaries. As this topic continues to rise, it is paramount that brokers stay aware of their role in upholding fiduciary responsibility.
Interested in learning more about the RAD Collective? Check out the RAD Collective website.
About the RAD Collective:
The RAD Collective is an organization created by Archetype comprised of innovative and forward-thinking employee health benefits brokers and consultants. Over -60 top performing members from 30 different brokerages come together to work towards the goal of personal and collective growth. The community offers an environment to facilitate collaboration around industry-shaping innovation. The RAD Collective is led by Steve Herman and hosts various member events throughout the year to discuss important topics in the employee benefits industry.